Corporate Responsibility Report 2011
Transcription
Corporate Responsibility Report 2011
1 / 84 sustainability Corporate Responsibility Report 2011 Contents Contents 01 Introduction 02 Customers 03 Personnel 04 Operations 05 Society 06 GRI Introduction Customers Personnel Operations Society GRI 2 / 84 Contents Introduction Customers Personnel Operations Society GRI 3 / 84 Contents 01 Introduction Finnair and sustainability 22 34 05 Society The right way to trade emissions 35 The world of Finnair.............................................................. 5 Tomorrow’s leaders today..................................... 23 Making strides in carbon reduction.... 38 The capacity to endure....................................................6 Well-being at work............................................................... 23 Trends in sustainable tourism....................... 39 Guidelines for success.......................................................9 Keeping the channels open.................................24 Finnair in the world.......................................................... 40 ......................................... 4 ............................................ 4 Achievements and goals.............................................11 Circles of cooperation..................................................... 12 The state’s view as majority shareholder....................................................................................... 14 02 Customers Our promise to the customer .............................................. 15 ........................... 16 The responsibility that corporate customers expect.................................................................... 17 Recycling in the cabin.................................................... 18 Magic in the air............................................................................19 What they’re saying about us.......................... 20 03 Personnel Responsible restructuring ................................................ 04 Operations Making every plane count 21 ..................................... .......................................... 26 ...................................... 27 The four pillars of fuel efficiency...............28 Green thoughts on a blue sky......................... 30 ........................................................... .............. Creative livelihoods in India.............................. 43 Out with the old, in with the old.................44 06 GRI Economic responsibility ............................................................................. 45 ............................................ 48 The future of biofuels......................................................31 Environmental responsibility............................51 To recycle or not to recycle?..............................33 Social responsibility.......................................................... 61 Contents Introduction Customers Personnel Operations Society GRI 4 / 84 Finnair and sustainability The Finnair Group’s core mission is flying passengers and cargo and providing travel services. That’s a simple way of putting it. However, this business is anything but. To peer into the world of Finnair is to explore a diverse cross-section of industrial and commercial activity required to fly more than eight million people more than 135 million kilometres to more than 70 destinations in Asia, Europe and North America. To measure and account for the financial, social and environmental sustainability of this enterprise, back in 1997 we became one of the first airlines to report on sustainability. Since 2008, we have followed standards set by the Global Reporting Initiative, the most widely recognised international authority on sustainability reporting. reporting data and commentaries that explain that information and put it in context for the casual reader. So dive in and have a look around behind the scenes at Finnair. We hope you find yourself engaged and invested in the ongoing story of what we do. Sustainability is ultimately a journey we all take together. Finnair key facts 2011 • Turnover 2,257.7 EUR million • 8 million passengers • Personnel of 7,467 • 10 destinations in Asia, over 50 in Europe • Fleet of 65 aircraft Key sustainability indicators 2011 01 Introduction Finnair and sustainability ............................................ 4 The world of Finnair.............................................................. 5 The capacity to endure....................................................6 Guidelines for success.......................................................9 Achievements and goals.............................................11 Circles of cooperation..................................................... 12 The state’s view as majority shareholder....................................................................................... 14 We do this because in business, as with much else in life, what gets measured is what gets improved. For example, CO2 emissions per seat have fallen by more than a quarter since 1999, even as our traffic has increased. Moreover, we are on track to reduce emissions a further 24 per cent by 2017 from 2009 levels. There’s always more work to be done, of course – and not just on emissions – but that work is only possible with a clear-eyed assessment of the reality of our business that GRI guidelines enable. This year, for the first time we have formatted this report for optimal viewing on electronic devices such as laptops and tablet computers, with easily navigable links between 2011 2010 2009 Fuel consumption, 1,000 kg 800,449 704,885 712,487 Flight emissions, CO2, 1,000 kg 2,521,414 2,220,388 2,244,334 Flight operations Personnel Departure turnover, % 7.0 7.3 5.2 Illness and accident absenteeism, % 5.4 5.5 5.4 Contents Customers Introduction Personnel Operations Society GRI 5 / 84 Information graphics: Tero Harsunen THE WORLD OF FINNAIR 1 Finnair’s Network Control Center works 24 hours a day to ensure accurate and smooth flight operations. 2 We seek ways to reduce heat, electricity and water consumption in our offices. We also sort office waste for collection and recycling. 3 Employee well-being and work capacity are monitored by Finnair Health Services. As part of its work, it participated in a four-year study of the health effects of shift work and sought ways to prevent negative health effects associated with shift work at irregular hours. CDA 1 Check in via Internet Check in via text message Normal landing 11-12 km 2 Finnair offers customers several options for checking in Finnair aircraft land with a Continuous Descent Approach (CDA) whenever possible. CDA landings reduce noise, fuel consumption and emissions. 3 Check-in kiosk Well-maintained and clean engines consume less fuel and emit fewer greenhouse gases. Finnair Technical Services operates under an environmental permit and aims to reduce the environmental impact from, for example, the use of chemicals in aircraft maintenance. Baggage drop by the check-in kiosks C B A When Finnair Cargo maximises aircraft payload we can fly with fuller planes, which reduces emissions per tonne of transported goods. B In 2011, Finnair Catering generated some 3,380,900 kg of waste, of which fully 57 per cent was reutilised, meaning it was either reused as material or incinerated for use as energy. EU regulations concerning catering waste originating from outside the EU prevent Finnair from reutilising more. A A C B C When 1 kg of fuel is burned, 3.15 kg of CO2 is discharged into the atmosphere. Greenhouse gas emissions are by far an airline’s largest environmental impact. Finnair improves fuel efficiency and reduces emissions by technological, operational, infrastructural and economic means. Finnair’s promise of service is a promise of peace of mind, and our professional and experienced personnel are the keys to fulfilling this. All Asian flights also include cabin crew from the destination country in Asia. Contents Introduction Customers The capacity to endure Mika Vehviläinen ceo What does sustainability mean to you? To put it as simply as possible, sustainability is endurance. As a company, our ultimate goal is to endure – to create lasting shareholder value. To be responsible with shareholders’ investments is also to be efficient. In the aviation business, a very energy and capital intensive sector, efficiency is essential for creating shareholder value. Fuel accounts for about 25 per cent of our annual cost base, for example, and every drop of fuel saved translates into an appreciable gain for the company. And yet the concept of shareholder value is not always properly understood, I think. It cannot and should not also entail passing on as much cost to society as legally possible, whether in the form of pollution, exploitation, or what have you. That’s not sustainable. These are negative externalities, which is to say they are operational costs borne by society and not by the company. They are in effect subsidies, and to depend on them is unhealthy, and very often fatal, no matter what shape they come in. The Finnish government is a majority owner in Finnair, but Finnair is responsible for its own business. We receive no subsidies from the government, and I believe that in the longer term, that works for our benefit. We must continuously strive to improve our operations in all aspects of sustainability, instead of relying on subsidies and resting on our laurels. Personnel Operations Society GRI 6 / 84 Contents Introduction Customers Personnel Operations Society But it sounds like subsidies would be good for financial sustainability, at least. Any business that effectively volunteers to become dependent on the undue externalisation of its costs is a business that has surrendered control over its own destiny. It’s a business where innovation dwindles, bad habits die hard and the competitive edge is left to more selfsufficient players who aren’t vulnerable to forces – whether political, economic or natural – that tend to inevitably re-internalise those costs. In aviation we have a very good example of an external cost – CO2 emissions – being re-internalised not only by various emissions trading schemes or other taxation, but by the escalating real price of fuel itself. Historically, the price of fuel more or less went up and down according to the state of the economy. In plush times airlines were able to What is a better definition of financial sustainability? Financially, shareholders have a right to a return on their investment. It is critical then that we maintain a strong balance sheet so that we retain the capability to invest and the capability to give shareholders profitable returns. The aviation industry generally tends to be very sensitive to broader macroeconomic highs and lows, so it’s important to be sufficiently capitalised to weather storms and seize opportunities to grow or innovate even in tough times. This year, despite an undeniably tough year for the global economy, we were able to acquire a 40 per cent stake in Flybe Nordic, an associated venture with Flybe Group Plc that enables us to expand our route network and offer a better experience to regional custom- compensate for higher fuel costs with higher passenger demand. But in 2011, the fuel price stayed high even as the economic picture in Europe and America darkened, thanks to growing demand for fuels in the developing world and the problems in the Middle East. Airlines that had invested in reducing emissions had invested in reducing their consumption of very expensive jet fuel, leaving them much better equipped to cope with severe market stress in the aviation sector as a whole. By contrast, airlines that were dependent on heavy fuel use (or indeed, other types of subsidy from budget-slashing governments) found themselves in a much worse position. Sometimes, of course, it makes sense for society to share the cost of unprofitable or inefficient but necessary business activity. But those kinds of decisions are for governments to make, not private companies – for the good of both. ers. We also opened a new nonstop route between Helsinki and Singapore, made possible in part by passengers transferring from the new airline’s feeder flights. In 2012 we will be the first airline to directly connect Europe with Chongqing, China’s growing and dynamic inland metropolis with a population of nearly 30 million. So despite a hard year, we were still able to position ourselves for long-term success. You mentioned how financial and environmental sustainability are interrelated in aviation. What about social responsibility? Socially, Finnair is much more likely to achieve its ambitious goals – to double its Asian traffic and become the most desired option in travel between Europe and Asia by 2020 – when its employees are professionally fulfilled and operate in a safe work environment without unwarranted stress. Social responsibility is crucial especially now, when Fin- GRI 7 / 84 Contents Introduction nair and other airlines are in the midst of unprecedented structural change with inevitable impact on personnel. In 2011 we announced that we’re targeting a permanent reduction in our annual cost base of 140 million euros. The aim of this restructuring program is to improve competiveness and restore profitability. This is a major structural change that touches our employees in a very concrete way. In 2011 we announced 550 redundancies in our Technical Services and in administration, sales and marketing. Redundancies are painful – there is no way around it. But we want to implement these difficult changes in an open, transparent and consultative fashion, while investing in helping affected employees find new employment through our Career Gate program, which helps employees identify new job opportunities and apply for new employment. The way we treat people in these circumstances will, in the longer term, define our ability to maintain and recruit top talent. Externally, our business depends on excellent relations with the dozens of destinations whose airports we fly to on a daily basis. That means flying aircraft that make less noise and emit fewer emissions while providing vital global connections to local economies. A wellfunctioning airline has a positive role to play in fostering mobility and commercial opportunity in the places where it does business. Companies with global “just-in-time” manufacturing processes, for example, can only be located in areas with robust and reliable flight connections. Does Finnair have a responsibility to society beyond where commercial interests are concerned? There is no contradiction between responsibility and good business. Even though we are not a charity but a listed company seeking to Customers Personnel Operations Society deliver profitable returns to shareholders, yes, of course Finnair has a responsibility to society at large. This is not just because our majority shareholder is the Finnish government, but because we are a significant player in our home market and in other countries where we operate. We are a part of the local aviation ecosystem and our operations have an impact on it. That is why we must try to take into account all impacts of our operations wherever we operate. Our stakeholders start with the customer and extend all the way through employees, supply chain partners, and various interest groups to the greater society in which we all operate. To speak broadly, it’s true what they say: Business can’t succeed in societies that fail. I also believe that successful businesses support the steady development of society. Finnair has been flying passengers and cargo for 88 years. For us to prosper and grow for another 88 years, the circle of prosperity around us will have to expand as well. Certainly the rising economic tide from Asia makes me an optimist in that regard. For the sake of convenience, we often talk about financial, social and environmental sustainability, but there are in fact limits to these distinctions. At some point, they all converge. The Japanese might say they are all just different views of the same Mt. Fuji. It’s not just that sustainability factors into strategic considerations, but that it provides the starting point for those considerations. If you want to be in it for the long haul, it’s what you have to do. GRI 8 / 84 Contents Introduction Customers Personnel Operations Society GRI Guidelines for success Kati Ihamäki Vice President Sustainable Development The purpose of consistently reporting according to GRI guidelines is to produce sustainability data that are broadly recognised and comparable from year to year. GRI data make possible accurate sustainability comparisons between companies and industries, and between a company’s past and its future. 2011 is the fourth year for which Finnair has gathered GRI data, and the company is beginning to assemble one of the more comprehensive records of historical sustainability information available in the aviation sector. This growing body of reporting data enables Finnair to reflect, in concrete terms, on what has been achieved in the past and on what to strive for in the future. Kati Ihamäki, Finnair’s Vice President of Sustainable Development, has played a key role in bringing the company into the GRI age. Looking back at the past four years, what trends do you see? I would say that generally we’ve seen a renewed focus at Finnair on accounting for social responsibility. In our pre-GRI reporting prior to 2008, we focused more on measuring and reporting our environmental impact. Coming from a country like Finland, where legislation on social issues is very strong, we tended to take the social aspect of sustainability for granted. But as our business became more global, we encountered a need for more information on other aspects of sustainability as well. GRI guidelines have obliged us to take a deeper look at issues surrounding not only product responsibility and human rights, but the global effects of the travel industry supply chain as a whole. GRI forces us to re-evaluate and renew policies and codes of conduct from a fresh, global perspective. We’ve gained a clearer understanding of the world we operate in. We also now have a clearer idea of which indicators meet the criteria for materiality in our sector, i.e. which indicators are relevant to an airline’s impact on the world, for better and for worse. We have also tried to move closer to integrating the process of financial and sustainability reporting, but we are not there yet. What has Finnair done differently as a result of GRI guidelines? Prior to the GRI, we had already been reporting on many indicators, especially environmental ones, in a consistent way for many years. But our social reporting is now at a consistent standard as well. Additionally, since the GRI reporting style calls for stakeholder engagement to help identify the issues of materiality, it often encourages us to give priority to more issues than legislation or even the GRI itself strictly requires. The GRI, which has no specific instructions for the aviation sector, has no requirement for reporting on noise, for example. But that is a very important externality of an airline in the view of all stakeholders, and so we report on it. Another thing is that the data we collect highlights issues that might not have occurred to us to raise in the public sphere otherwise. By keeping track of the catering waste that we do and do not recycle from planes, for example, we have produced a concrete, measurable consequence of current EU rules that forbid recycling of waste originating from outside the EU. We are able to be proactive in the conversation around sustainability and push the ball forward. Kati Ihamäki 9 / 84 Contents Introduction These reports have also created expectations for Finnair that we will continue to report on the same indicators in the future as we do now. Once you start reporting, you can’t stop – investors, the general public and other stakeholders are hungry for this information – and you need to explain things when the indicators change, for better or for worse. This promotes a dynamic of self-questioning, and helps keep the company aware of best practices and norms in the wider world. In any company, especially one with as many specialised “moving parts” as an airline, a certain tunnel vision among some personnel is inevitable. But the reporting process works against that tendency. It’s healthy. What are the goals for 2012? We are a part of IEnvA, a pilot group of airlines within IATA with the goal of developing in 2012 an environmental management system (EMS) that could be used by any airline to assess and improve its environmental performance. The standards would be specific to the airline sector and compatible with the IATA Operational Safety Audit as well as other more general EMS standards not specific to any one industry. An airline-specific EMS standard would be an important achievement sector-wide. At Finnair itself, our most important goal is continuing to improve fuel efficiency. We are continuing with our “weight watcher” programs and aim to bring lighter catering trolleys and cargo containers into use. We’re also continuing to work on more efficient flight operations and routings, and cooperating with our airport partners to increase CDA landings. Our biofuels strategy is developing as well. On the ground, we’re doing what we can to help the builder of our new headquarters to obtain LEED Gold certification, while also defining environmentallyfriendly working methods in the new building. Customers Personnel Operations Society In 2011 we became the first Finnish company to become a signatory to the UN’s Women’s Empowerment Principles, and as part of that we renewed our equality policy and code of conduct. A major goal of 2012 is to proceed with the work of implementation. That means communicating the policy and holding discussion forums within the company, and measuring the effectiveness of that activity in some way. GRI 10 / 84 Contents Introduction Customers Personnel Operations Society GRI 11 / 84 Achievements and goals Financial responsibility Social responsibility Environmental responsibility Objective Actions in 2011 Timetable Sustainable, profitable growth Announced plans for permanent reduction of EUR 140 million in cost base, optimised fleet and route network, invested in Flybe Nordic associated undertaking. Continuous objective Preparing for emissions trading Prepared for emissions trading with assurance provided by PriceWaterhouseCoopers. Emissions trading scheme came into force in EU on January 1, 2012 with Finnair prepared and actively participating in the scheme and working toward the development of a global scheme. Reducing absenteeism due to illness and accidents Absenteeism reduced slightly to 5.4 % from 5.5% in 2010. Continuous objective Renewing human resources strategy and preparing Code of Conduct Strategy renewed; equality policy renewed; code of conduct written. Code of Conduct to be communicated and implemented in 2012; effectiveness of equality policy continues to be monitored. Developing management practices Use of Performance Dialogue sessions with employees, where targets are mutually agreed upon in line with overall company goals and strategy. Continuous objective Reducing flight emissions Reduced emissions from 85.05 grams per available seat kilometre in 2010 to 84.41 in 2011. Continuous objective; stayed on target to reduce emissions per seat by 41% from between 1999 and 2017 and by 24% between 2009 and 2017. Waste recycling Improved waste sorting methods throughout Finnair Group resulting in total waste reutilisation rate of 67 % (2010: 54 %). Continuous objective Biofuels development July 20, 2011 flight from Amsterdam to Helsinki was longest biofuel flight made up until that date. Longer biofuel flights planned for 2012 between Asia and Europe; taking part in EU Biofuels Flightpath 2020; continuous projects with different partners. Energy consumption in Finnair Group properties Modernised visual systems in flight simulators at Finnair Flight Academy to consume less energy; Aurinkomatkat-Suntours launched project to obtain WFF Green Office certificate. Continuous objective; stayed on target to reduce energy consumption by 9 % from 2007 level by 2016. Contents Introduction Customers Personnel Operations Society GRI Circles of cooperation Arja Suominen Senior Vice President Communications and Corporate Responsibility “What I say is different from what you hear,” Juice Leskinen, the late Finnish rock star, once told a reporter. “And what you hear is different from what you write – and what you write is different from what readers read.” That, in a nutshell, is the challenge of all communications work. In the long chain of human perception that constitutes our engagement with the world in which we operate, everyone – customers, employees, shareholders, public officials, NGOs, media – are looking at and understanding events from their own contexts and perspectives. It’s all too easy for misunderstandings to erupt, or for different parties to simply not hear each other and proceed without the right knowledge. That’s why timely, honest and open engagement is essential to doing business. That means listening to stakeholders in good faith, taking them at their word, and taking their views seriously as we chart the course forward. And an atmosphere of constructive discussion is only possible when we have the imagination and empathy to understand where different parties are coming from. That atmosphere of engagement is perhaps best imagined as a series of concentric rings, each one revolving around the customer at the core – with all levels of cooperation and communication encompassed by society at large. In ensuring good relations across the range of this map, our goal has been to move from the role of passive respondent and reporter to one of an active initiator of debate – to highlight differ- ent themes, to challenge received wisdom, and to identify and present new perspectives. The proactively engaged company that is in tune with the times is also well placed to benefit strategically. We were one of the first airlines to provide authorities and environmental groups with emissions data, for example, and were well-prepared for the onset of emissions trading for airlines in the EU in 2012. At the same time, we have also been pushing for the speedy adoption of a global emissions trading scheme through IATA, AEA and the Aviation Global Deal group among other bodies in the aviation sector, which would ensure a level playing field that rewards airlines that take active steps to reduce their carbon profile. Engine emissions in fact represent about 95 per cent of an airline’s impact on the environment, and it is naturally one of the most prominent sustainability issues in discussions with stakeholders. Another major sustainability issue of interest to virtually all stakeholders is employee relations. In this regard, open and transparent communication is vital, especially given the unprecedented structural transformation underway at Finnair and the rest of the airline business. Part of this transformation entails inevitable redundancies. How we treat those affected by this difficult process is a key measure of corporate responsibility. Finally, how the aviation sector affects local economic and social opportunities is an important area of engagement at Finnair. Especially in the Nordic countries, a relatively sparsely populated region with long distances between urban areas, timely and comprehensive air connections can be a decisive factor in companies’ location decisions and in communities’ viability. On all these matters and more, stakeholders are watching us closely, and we welcome the scrutiny – and the conversation. Arja Suominen 12 / 84 Contents Introduction Customers Personnel Operations Society GRI 13 / 84 Stakeholder Channels Subjects Customers Surveys, research, written feedback, websites, social media, customer service encounters at every stage of the journey Emissions and noise reduction, safety, recycling, responsible tourism, charitable giving via Finnair Plus, on-time performance Personnel Personnel magazine, intranet, internal blogs, theme weeks, personnel events, 4D Wellbeing At Work survey, occupational health unit, performance dialogue sessions, discussions with labour organisations, Career Gate Working capacity and wellbeing at work, target setting, changes to improve productivity, increasing trust, reducing environmental impact on the job, career assistance for employees made redundant Shareholders, investors and analysts Stock exchange releases and reporting, investor meetings, road shows and other events, investor section on Finnair Group website, Carbon Disclosure Project, Annual General Meeting Improving profitability in a sustainable way, sustainable investing, increasing long-term competitiveness in the changing market environment Aviation sector Membership in IATA and AEA, membership in TOI and STLN (Sustainable Travel Leadership Network) for sustainable tourism, oneworld alliance member, code-share cooperation with other airlines, cooperation with Finavia and other airport operators, sector seminars and working groups, manufacturers, AGD Safety, emissions reduction, emissions trading, air traffic management, biofuel supply chain development, sustainable tourism, economic impact of sector Authorities and government Various government ministries, ministerial working groups, events, meetings, Finnish Consumer Agency, Flight Safety Authority (TraFi), embassies Safety, emissions trading, air traffic management, impact of operations on environment and noise, impact of operations on economic life and mobility, traffic continuity, biofuels, employee relations Non-Governmental Organisations Cooperation with Finnish Association for Nature Conservation, Baltic Sea Action Group, UNICEF, Finnish Red Cross and other NGOs; member of the Carbon Disclosure Project; partnerships with sustainable design firms such as Tikau, Uusix and GlobeHope Greenhouse gas emissions reduction, environmental remediation, public health measures, disaster relief, wildlife protection, common interest projects for sustainability Suppliers Contractual cooperation, Finnair procurement guidelines, extranet Cooperation efforts to reduce emissions and other environmental impacts, monitoring of responsibility everywhere in the value chain Media Press releases, press conferences, visits by reporters, press trips, interviews, websites, blogs Emissions reduction, personnel relations, financial sustainability, charitable cooperation projects, trends in traffic, biofuels, emission trading , noise, impact of aviation on local economy and mobility General public Communications via media, websites, blogs, Facebook, Twitter, e-mail, lectures Emissions reduction, labour relations, presence in local economies, charitable cooperation projects Contents Introduction Customers Personnel Operations Society GRI The state’s view as majority shareholder heidi hautala Finland’s Minister for International Development Heidi Hautala is also responsible for Ownership Steering in the Prime Minister’s Office, overseeing companies such as Finnair where the government of Finland is a shareholder. What significance does corporate responsibility reporting have for the state as a shareholder? In my mind, state-owned companies have brought many good practices to Finnish business. A comprehensive model for corporate responsibility reporting can contribute to this way of influencing. I also believe that Finns expect this from state-owned companies, whose operations they have a strong connection to, either as customers or emotionally. How should corporate responsibility be visible in the Board of Director’s work? Besides being business management professionals, board members in companies should be skilled and experienced in dialogue with society at large. I support increasing diversity in boards of directors, in terms of age, gender, nationality and networks. What do you pay attention to when reading corporate responsibility reports? Good corporate citizenship encompasses a variety of things: employee and subcontractor relations, minimising the environmental impacts of operations, and respecting equality are all important aspects. The retention bonuses that Finnair granted key people in 2009 resulted in a lot of discussion. What lessons can companies take from this for their financial and corporate responsibility reporting? A responsible company is in tune with the values of its operating environment, and the changes in those values. Openness and reasonability are key expectations in today’s society. It is not enough to act and report only based on rules and regulations, but this also has to be done in tune with the times. Reporting has to be consistent with the company’s operations. Any attempts at evasion or spin will be caught sooner or later. Do environmental aspects play a role when you choose your airline? For environmental reasons, I naturally try to avoid flying and for example participate remotely in some meetings. In my leisure time, I tend to stay and relax in Finland. My work as Minister for International Development does involve travel by air, and I place emphasis on the airline’s corporate citizenship more broadly. It would also be good if airlines made it easier for their customers to support environmental work by for example making it possible to pay an additional carbon dioxide charge to environmental organisations with one click when booking the fare online. Heidi Hautala 14 / 84 Contents 02 Customers Our promise to the customer Introduction ........................... 16 The responsibility that corporate customers expect.................................................................... 17 Recycling in the cabin.................................................... 18 Magic in the air............................................................................19 What they’re saying about us.......................... 20 GRI indicators: EN26; PR1–5, 8 Customers Personnel Operations Society GRI 15 / 84 Contents Introduction Customers Personnel Operations Society GRI Our promise to the customer Anssi Komulainen Senior Vice President Customer Service When Helsinki was announced as the World Design Capital for 2012, heads turned toward Finnair’s relatively small Nordic home base. Why Finland, and why Helsinki? What does it mean to be a design capital? More fundamentally, what is design, exactly? Design is often thought of simply as a byword for “nice” things – kitchenware, clothing, or furniture – but there’s so much more to it than that. To me, design is a way of doing things, a way of going about your business with a certain intentionality and proactive vision. At Finnair, everything we do flows from a promise of service to the customer, which is a promise of usability, responsibility and – not least – desirability. To fulfil this promise requires a thoughtful, design-based approach not just to various practical elements in our aircraft and lounges like seats, glassware and uniforms, but to the entirety of the customer experience itself. We have a long design heritage in Finland, and it’s only natural for us to extend the design philosophy to the way people travel as well. For an airline, this entails a vigorous process of service design, the goal of which is to optimise the customer’s experience at every stage of his or her journey, from the initial point of contact – researching when, whether, and with whom to fly – to the arrival at the final destination. Along the way, there are dozens of crucial encounters that can make or break the customer’s experience, from how they check in to how they “build their nest” at their seat for a long-haul flight. Some of these encounters, such as with electronic check-in systems or baggage delivery, don’t necessarily even involve Finnair directly, but a close partner. That’s why designing a whole customer experience also means taking responsibility for virtually every partner in the supply chain – including when things go wrong. How these customer encounters are managed, whether we’re directly involved or not, is key to Finnair’s collaborative Peace of Mind concept in service design. It encompasses not just customer-facing staff, but virtually every aspect of Finnair’s behind-the-scenes operations, from chefs, sales managers and top management to personnel at partner companies. In a business as complicated as modern commercial aviation, process can overwhelm the human element if we aren’t careful. The point of the Peace of Mind concept is that at the bottom of our process, we see customers and employees as individuals first. That helps us recognise and “stay ahead” of customers’ expectations, and should problems arise, to solve them as quickly as possible with a spirit of initiative and common sense. The human element is also key to our overall approach to our product. Our commitment to a modern fleet with fewer emissions and less noise, for example, is also a commitment to consumer safety, comfort and sustainability. Likewise, we have oriented our whole business around a strategy of quick travel times between Europe and Asia and hasslefree connections at an uncongested Helsinki Airport, a strategy that also requires close cooperation with airport authorities, codeshare partners and other parties, all with a view toward one seamless experience from the customer point of view. At any airline, there are always intense pressures to keep costs as low as possible and processes as efficient as possible, but our ultimate promise is that above all else, we will keep our eye on the needs of the customer first. That’s what “designed for you” really means. Anssi Komulainen 16 / 84 Contents Introduction Customers Personnel Operations Society GRI 17 / 84 The responsibility that corporate customers expect Mika Perho Senior Vice President Commercial Division What kind of things do corporate customers look for from their airlines of choice? First and foremost, of course, they are looking for a competitive travel service that helps them realise their business objectives. Customers are looking for smooth, hassle-free travel to that crucial face-to-face meeting, conference or training session, often over very long distances. They are looking for a reliable, high-quality service that enables the critical, everyday functions of any modern company wishing to seize opportunities in the global marketplace. Since corporate personnel’s time is extremely valuable – time is money – offering the shortest travel times between Europe and Asia with smooth transfers via Helsinki also certainly helps us make a compelling proposition to the rapidly growing pool of companies with intensive business travel needs between the two continents. So too does our commitment to travellers’ well-being and peace of mind at every stage of their journey. Arriving at that critical business function in optimum shape can make all the difference between success or failure. Perhaps less obvious as a competitive factor, however, is our record of sustainability. One might be surprised to learn that most of our corporate customers make specific enquiries regarding sustainability issues – much more so than private consumers, in fact. This is because many of our corporate customers report – just as we are doing in the document you are reading now – to their own stake- holders on their own sustainability issues. An accurate account of their emissions in company travel, for example, is necessary for their own reporting, and we are happy to generate emissions reports for this purpose, based on real emissions data with assurance provided by PriceWaterhouseCoopers. By flying a modern fleet and using the most efficient great-circle routings between Europe and Asia, we can have a favourable impact not only on customers’ financial bottom line, but on their environmental bottom line as well. All corporate customers are also entitled to free membership in the Finnair Corporate Program, which helps them control costs. Member companies enjoy discounts on flight tickets, flexible ticket types that allow for last-minute changes, and access to reports of their corporate travel patterns at the click of a button, thereby enabling more effective corporate travel planning and cost management. At a time when more companies than ever are facing cost pressures on their corporate travel policies, we find that this service proves especially useful. An airline’s environmental and financial responsibility as such may not be the first factors on corporate customers’ minds, but they are absolutely required as the baseline of a modern airline’s expected behaviour. Exceeding those expectations only helps us cement trust with customers whose international business functions depend on a high standard of service. We wouldn’t have it any other way. Mika Perho Helsinki Contents Introduction Customers Recycling in the cabin Minna Akkanen Purser As a purser, environmental responsibility on the job starts in the crew briefing before the flight, when we get all the info on the flight and set our targets. Recycling of cabin waste is part of Finnair procedure, but I include the sorting of recyclable material like metal, plastic, glass and cartons in our targets anyway. It’s never a bad idea to have a reminder, and besides, we find that customers really appreciate it and are very keen. We’ve noticed that many Japanese customers, for example, pre-sort their rubbish for us even before we come to collect it. Unfortunately, when we fly outbound, whether the trash is recycled depends on the procedures in place at the destination airport, so we can’t always make it a part of our targets. Sometimes the voluntary effort that passengers and crew alike put into separating trash goes to waste – literally. But I started at Finnair 23 years ago, and I’ve seen big improvements in environmental awareness since my career in aviation began, across the whole industry. I’m hopeful attitudes can get better still. Minna Akkanen Personnel Operations Society GRI 18 / 84 Contents Introduction Customers Personnel Operations Society GRI 19 / 84 Magic in the air Finnair’s customer experience design defines our targets for level of service. The first is called the Brilliant Basics, or everyday service at every step of the journey. The Brilliant Basics create the conditions necessary for the second layer of service, the so-called Magic Moments, to take place. These moments are by their nature unpredictable and spontaneous, but are made possible by staff being given the “license to act” and embrace both their individuality and the customer’s. That individuality is at the heart of the Peace of Mind concept in service culture. Finnair has established an intranet site for staff to share Magic Moment stories amongst themselves for inspiration; a selection translated from the original Finnish follows. ——— “Today on the Malaga flight the gate agent Hansu worked some of her magic. :) Almost all the passengers had already boarded, with the exception of a Russian family. The father came to the gate to inform the gate staff that their family wasn’t taking the trip anymore, because he had quarrelled with the family’s mother. Hansu said that, no, that’s not possible. (The plane was already loaded and unloading the bags would have taken too much time). So she left to go find the family’s mother and children. When she found them, she consoled the lady with a few home truths about men and marriage, and eventually managed to lead her to the ticket machine -- while the man followed dutifully behind with the bags. The aircraft departed on schedule as a result of Hansu’s considerate empathy for the couple. :)” ——— “During a very busy time we were informed that there was a dog in a pet carrier in the lobby, and this Golden Retriever puppy had had a little accident, making quite a mess in his pet carrier and on himself. This small passenger was travelling with his owner, but bringing the passenger back to the Departures Hall was not possible. Departure Hall Baggage Handlers Vikström and Pellikka decided to give the pup a helping hand. They removed the puppy from his pet carrier, cleaned the pet carrier and threw away the badly soiled blanket, replacing it with a new, clean and soft Finnair blanket. They cleaned up the little passenger in a wash basin, with the puppy apparently thoroughly enjoying the unexpected FINNAIR-SPA service. When the little passenger was returned to his clean and slightly redecorated pet carrier, he proceeded to immediately doze off on the new blanket with a satisfied look on his face.” ——— “I visited the cockpit on a flight recently and the Captain pointed out the beautiful aurora borealis to our left. I admired it for a while and then returned to the cabin. I went straight to a passenger who was working on something with the window shades down. I told the passenger what was going on in the horizon and turned off the screens around his seat (the seats were empty) to reduce the amount of ambient light. The passenger was enthralled by the sight and kept looking out of the window and taking photos for over an hour. It was the first time he had seen the Northern Lights and afterwards he thanked me profusely.” Contents Introduction Customers Personnel What they’re saying about us 2011 will be remembered as a year when Finnair began profound structural changes to meet the demands of a transformed aviation marketplace. But it was also a year when, despite the changes, company employees kept their eye on the ball and continued a tradition of excellence. Recognition of that came in June 2011 at the Paris Air Show, where the World Airline Awards named Finnair the best North European airline. The World Airline Awards is based on the Skytrax World Airline Survey, renowned in the aviation industry and widely known as the only global and independent customer satisfaction survey measuring the operations of airlines. Readers of the American travel magazine Travel + Leisure, meanwhile, voted Finnair the second best airline in Europe and the 12th best airline in the world. Finnair was also the survey’s best improver, rising to number 12 from number 28 the year before. Finally, Priority Pass selected Finnair’s lounge as the best in the world from more than 600 lounges worldwide. The American Global Traveler Magazine for business travellers meanwhile named oneworld as the Best Airline Alliance in 2011. The honour, based on a reader survey, was given for the second year in a row. The members of the oneworld airline alliance include, American Airlines, British Airways, Cathay Pacific, Finnair, Iberia, Japan Airlines, LAN, Qantas, Royal Jordanian and S7. airberlin and Malaysia Airlines join the alliance in 2012. Finnair also won two European Excellence Awards for two of its public relations projects. Finnair’s Rethink Quality project from 2010 won the award in the Travel and Tourism category, while Finnair’s Angry Birds Asian Challenge mobile gaming tournament on a Helsinki–Singapore flight in September won the Event category. The MTL Communications Awards, arranged by the Finnish Association of Marketing Communication Agencies, also awarded the Rethink Quality campaign with the top prize in the Business to Consumer series. The Rethink Quality project was also cited when Airlinetrends.com named Finnair one of the world’s most innovative airlines. In September 2011 Finnair won a Silver Euro Effie award in recognition of its Local Heroes marketing campaigns in Manchester, England and Düsseldorf, Germany. The campaigns, utilising local notable personalities and aimed at business travellers flying to Asia, far exceeded company targets and increased Finnair’s brand awareness and supported sales growth in two of its key growing European markets. Finnair is the first Finnish company to win an Effie. Operations Society GRI 20 / 84 Contents 03 Personnel Responsible restructuring Introduction ..................................... 22 Tomorrow’s leaders today..................................... 23 Well-being at work............................................................... 23 Keeping the channels open.................................24 GRI indicators: EC3, 5, 7; LA1–10; LA12–14; HR1–8; SO2–5 Customers Personnel Operations Society GRI 21 / 84 Contents Introduction Customers Personnel Operations Society GRI Responsible restructuring Manne Tiensuu Senior Vice President Human Resources “Restructuring” is a bland word, but the process is anything but. Reorganising a company to meet the demands of a constantly changing commercial environment is not always a pleasant task. Sometimes, happily, it means adding personnel and aggressively growing. In other circumstances – and 2011 was regrettably such a time for Finnair – it can mean making highly skilled and valued employees redundant. There’s no way around it: Telling anyone they no longer have a job is a painful and difficult process, and no line manager enjoys it. But there’s still a right way of going about it and a wrong way. How we treat the human beings affected in this process reflects not only on our corporate responsibility, but also on our ability to attract and retain a winning team in the future. For starters, we have a responsibility to employees to make personnel decisions in an open, consultative matter with employee representatives. Everyone understands we are in a business, and are as subject to prevailing business conditions as any employer. But when we confront those conditions together and in an open manner, redundancies – if they must happen – don’t come as a shock or a surprise. And if that day must come, moreover, it’s important that we be an active and positive force in this process, by giving employees made redundant the best tools available to secure their careers elsewhere. That’s where Finnair’s Career Gate program comes in. The initiative, launched in autumn 2011, is intended first and foremost to give rapid employment support to employees affected by personnel reductions. It works by first coming up with a service package tailored to the employee’s needs and skills – there is no “one size fits all” approach. From there, Finnair proactively contacts companies and other employers with acute needs for workforce and also informs the employee about internal and external job opportunities that might be a good fit. We also provide practical support with CV building and interview preparation, and make use of labour market training programs when relevant. The Career Gate centre, centrally located at the Finnair headquarters building, is open for employees to avail themselves of computers, CV templates, and other career information. Because of close cooperation with government and unemployment offices, at the centre employees can also directly consult with unemployment officials about career matters. While we are focusing on providing a helping hand to colleagues most affected by the most significant restructuring in Finnair’s history, we also have a duty to the employees who remain with us, and who will carry Finnair along the path to long-term sustainability. This entails significant training efforts for line managers, employees and labour leaders alike on how best to cope with the changes. In the long run, our aim is also to develop Career Gate into a neutral model for conducting career planning and managing internal mobility. In the future I would like to see it as a place where any Finnair employee can pop in to find information on career planning and labour market conditions, and ponder opportunities for their own professional development. In the long term, I believe HR has a positive role to play in empowering all employees to take control of their own destinies. Our employees determine our success, and I believe their HR team owes them nothing less. Manne Tiensuu 22 / 84 Contents Introduction Customers Personnel Operations Society GRI 23 / 84 Tomorrow’s leaders today Well-being at work The measure of a leader is often revealed in times of great change. With Finnair going through a major structural change program aimed at returning the company to profitability, we wanted to ensure management is well equipped to lead their teams through turbulent times. In 2011, Finnair launched Horizon, a leadership program for strategic leaders, and Takeoff, a program for 100 middle managers focused on change management and leadership development. The Takeoff program consists of two-day sessions plus follow-ups and learning groups, where participants learn to lead themselves, to lead their team according to Finnair Leadership attributes, and to lead their people and the business through Finnair’s changes. The sessions also provide an important forum for managers from disparate departments to get to know each other, share their experiences, coach their peers and deepen their understanding of each other’s business roles. That enhances everyone’s grasping of the business as a whole and of competitive challenges facing Finnair on multiple fronts. Helping each participant to identify and realise their own leadership potential is a key ingredient of Finnair’s long-term success and viability. Because there’s always a plane in the air somewhere, it’s in the nature of the airline business that people must often work odd hours. At Finnair, in fact, only about a third of employees work regular office hours. But shift work can make it difficult to follow regular lifestyle habits, cause sleep problems, and increase the risk of illness. Finnair Health Services has been investigating and controlling the risk factors of shift work over the past several years, and launched new health examinations as part of a research project aimed at benefitting employees and contributing to the wider body of occupational health knowledge. The new examinations focused on the health risks related to shift work, especially Type 2 diabetes. The investigation found that men clearly faced more diabetes and arterial disease risk factors than women. Of total personnel, 30 per cent were estimated to have the need to change their lifestyle in order to avoid diabetes. Finnair’s employees were nevertheless fairly healthy in comparison with Finland’s national average. The lifestyles and health of the flying personnel, moreover, were clearly better than those of the rest of the staff. The risk factors that emerged in the health examinations were discussed with each participant. In addition, those with an elevated risk of Type 2 diabetes were offered lifestyle counselling, to which they reacted very positively: Those at a great risk of diabetes reached the target of a 5 per cent weight loss more often than the others during the two- to threeyear follow-up period. Changes in cholesterol levels were also more positive among those who participated in the counselling. A total of 2,312 employees attended the inital health examination, of which 367 took part in lifestyle counselling, and 1,485 participated in the follow-up. The research project was carried out in collaboration between Finnair Health Services, the researchers of the Diabetes Prevention Unit of the Finnish National Institute for Health and Welfare (THL), and the shift work researchers of the Centre of Expertise for Human Factors at Work of the Finnish Institute of Occupational Health. Contents Introduction Customers Personnel Operations Society GRI Keeping the channels open Antti Miettinen Finnair Communications The air travel industry is in the midst of unprecedented structural transformation. With airlines’ survival at stake, how they go about their restructuring with their employees to meet the challenges of today’s market is critical. But as Finnair navigates these difficult times, the company is committed to proceeding in an open, deliberative fashion with employees, whether structural change involves cuts in personnel or not. Antti Miettinen, responsible for employee communications, explains how a commitment to openness works in practice. Why is it necessarily important to be open in internal communications? Why doesn’t management just make a decision and get on with it? I think every employee has the right to know where the company is heading, what the strategy is, and how it is performing against these goals. Without this fundamental information it would be very hard to assume that the managers would be able to lead their people, or that people would know what the things that really matter are. Open dialogue also encourages people to give their own input on the process. Even if the management might think differently from time to time, they are experts only to a certain degree. However, the open approach can actually feel more stressful at first. Until final decisions are made, there aren’t necessarily answers to all of the questions, so people need to learn to live with the uncertainty. But communicating the direction and changes actively and openly helps people to influence the future, come up with good and even better ways do to things, and, if need be, identify areas to save costs. It’s also much easier to accept news that is personally negative when there’s enough context. Communicating plans early also helps people make personal decisions. It seems that a lot of the changes necessarily involve discussions behind closed doors. How do we reconcile this with a spirit of openness? Open communication doesn’t mean you need to tell everything to everyone at the same time. Companies are creating all kinds of plans and scenarios all the time, and communicating premature plans and very early ideas would be harmful as the plans might change radically and cause wild rumours or unnecessary speculation. That’s why you need to have certain controls in place. The right moment to open communication channels is once you have clarified your thinking, and have the required commitment from your partners. Let’s remember that as Finnair is planning to create a strong network of partners, third parties and their shareholders, managers and employees are involved too. And they must get the information in the same fashion as your own audiences. How does Finnair foster openness internally without compromising negotiations with these outside partners? I’d emphasize again, that for our staff it’s better to know something about the plans than nothing, in which case the news would come from out of the blue, and I don’t think that’s good communications. It cer- Antti Miettinen 24 / 84 Contents Introduction tainly makes it more complicated when we say we are in discussions with partners regarding certain parts of our business. Employees naturally would like to know what a partnership would mean for them. We are also all curious to know with whom we are in discussions, and obviously until the agreement is made, we cannot name any names. This means that the teams who are engaged in these discussions need to know how to manage the communications without going into too many details. Usually, the details can be revealed only once agreements have been signed. That’s simply a fact in the business. But in any case, detailed knowledge of specific negotiations isn’t necessary for a spirit of openness in the workplace. What’s important is that the overall logic of the competitive situation is clearly communicated, and that respectful dialogue with employees on how best to face that situation is real. By that I mean taking employees’ concerns and opinions seriously, and making sure there are legitimate opportunities to influence decisions on how the company is developing. The best way by far to face the future is to face it together. Customers Personnel Operations Society GRI 25 / 84 Contents 04 Operations Making every plane count Introduction ...................................... 27 The four pillars of fuel efficiency...............28 Green thoughts on a blue sky......................... 30 The future of biofuels......................................................31 To recycle or not to recycle?..............................33 GRI indicators: EN1–30 Customers Personnel Operations Society GRI 26 / 84 Contents Introduction Customers Personnel Operations Society GRI Making every plane count Gregory Kaldahl Senior Vice President Resource Management It may sound obvious, but at the heart of any airline’s business strategy lies its route network, and the planes that fly on it. What may be less obvious, however, is that optimising their use is key to both a profitable and an environmentally sustainable airline. And we take this crucial aspect of the business very seriously. In 2011, we made a number of adjustments to the network, adding destinations such as Singapore and Dubrovnik while eliminating underperforming routes such as Lisbon and Bucharest. It is critical for Finnair to maximise the return realised by each of its aircraft assets, and if we can improve that return by a change to the network, we move closer to sustained profitability. Likewise, when our aircraft are being operated more efficiently, we are maximising the number of passengers we carry per unit of discharged emission in the atmosphere. Full airplanes, moreover, allow us to reinvest in our business, which is good for our customers, good for our employees and shareholders, and good for the environment. Thanks to that cycle of reinvestment, Finnair enjoys the luxury of a relatively young, fuel efficient fleet. This is important because each new generation of aircraft is approximately 20 percent more fuel efficient than its predecessor – allowing us to make critical savings on fuel costs and greenhouse gas emissions. Our Airbus narrowbody aircraft are, on average, just over ten years old and our Embraers are even younger, averaging approximately four years old. Our 15 widebody aircraft include eight A330s with an average age of less than three years and seven A340s averaging less than nine years old. Finally, our ATRs, operated in our FlyBe Nordic joint venture, are one of the most efficient turboprop aircraft on the market today. Nonetheless, we have determined that we can still better utilise the fleet, and do a better job of matching the right aircraft size to the right market. Thus in 2011 we announced the planned departure of four Airbus narrowbody aircraft from the fleet in 2012 – a reduction which, thanks to optimisation, will be virtually unnoticeable to customers and have no impact on personnel. Similar to the work we have done on the network, by optimising the fleet we are contributing to the sustainability of the enterprise and the environment. Aircraft are expensive assets, and they only make money when they are flying. By driving up the utilisation of each aircraft, we are ensuring we get the maximum possible return. At the same time, if we fly too many empty seats in our network each day, or are forced to sell seats below cost just to fill the airplane, we are being wasteful to both our planet and our company. In aviation, there need not be any tradeoff between financial and environmental sustainability. They are, in fact, one and the same. Gregory Kaldahl 27 / 84 Contents Introduction Customers Personnel Operations Society GRI The four pillars of fuel efficiency Ville Iho Chief Operating Officer It’s one thing to talk about emissions reduction and advocate for greater fuel efficiency, but making these goals an achievable reality requires a concrete strategy. It also requires strong cooperation across the whole aviation sector. Much like safety, it could be said that this is one area where airlines do not so much as compete, but cooperate closely for the benefit of all. Airlines, airports, air traffic managers, engine and aircraft manufacturers, transport authorities and researchers are all working toward a common goal of improving efficiency and reducing greenhouse gas emissions. In this collective work, four pillars of fuel efficiency have been broadly identified by IATA and ICAO, and Finnair systematically pursues each of them to meet or exceed its ambitious emissions reductions targets: 24 per cent per seat by 2017 from 2009 levels, and by 41 per cent per seat from 1999 levels. I. Technology Maintaining a modern fleet is one of the most important things an airline can do for the environment, as each new generation of aircraft reduces fuel consumption by approximately 20 per cent. The average age of Finnair’s fleet is about seven years; according to IATA, the average age of the world’s commercial aircraft is about 11 years. As we continue to retire older aircraft and welcome to the fleet state-ofthe-art, eco-efficient aircraft like the Airbus A350 (due 2015 onwards), we plan to continue staying ahead of the curve. Another aspect of technological innovation is alternative fuels. Biofuels, for example, have the potential to reduce overall carbon emissions by between 50 to 80 per cent, depending on how they are produced and which feedstocks they come from. On July 20, 2011 we flew our first biofuel flight, from Amsterdam to Helsinki, which was the longest biofuel flight to that date. In the coming year, we plan to fly our first long-haul flight between Asia and Europe with biofuel. The economics of biofuels do not yet make sense for everyday use, but Finnair’s early embrace of the technology – without the benefit of government subsidies – is helping to stimulate the developments needed in the overall biofuel supply chain and will, I believe, pay off in the long run. II. Operations But waiting for developments in technology alone is not enough. We proactively take control of our own destiny in the here and now by comprehensively reviewing operations with the goal of reducing fuel consumption. “Weight watcher” programs for all aircraft, for example, can mean lighter seats, catering trolleys and hold containers made of lighter, tougher, more modern materials. The lower the aircraft weight, the less fuel it needs to burn. Sophisticated cost-index components of aircrafts’ avionics, meanwhile, perform real-time calculations based on weather and flight plan data to suggest changes in speed or altitude that optimise fuel economy. On the ground, single-engine taxiing and using airports’ mains electrical power instead of aircrafts’ fuel-hogging auxiliary power units can also have a significant impact on fuel economy and on reducing noise at airports. Ville Iho 28 / 84 Contents Introduction III. Infrastructure Infrastructure that determines the way airplanes land and the courses that they are allowed to plot are crucial factors in fuel efficiency, and addressing them requires close cooperation with air traffic authorities in multiple countries. At Helsinki Airport, good cooperation with Air Traffic Control allows about 46 per cent of Finnair’s landings to use a Continuous Descent Approach (CDA), which requires significantly less fuel than the standard “stepped” approach. In traditional stepped landings, pilots must repeatedly increase engine thrust to level off as they descend, which greatly increases emissions and noise around the airport. But greener, quieter CDA landings are only possible with the welldeveloped, uncongested infrastructure of airports such as Helsinki’s. Away from Helsinki, the world’s air traffic management system is a complicated patchwork of nation-based air traffic control systems. In Europe particularly, which is burdened with about 40 different flight control zones, the shortest distance between two points is not always a straight line. Planes must often zigzag around different airspace requirements, which can be extremely wasteful of both time and fuel. The Single European Sky, a pending initiative of the EU, would eventually do away with these different zones of control and would potentially save around 10 per cent in aircraft emissions almost immediately, as flight plans through Europe are rationalised, less fuel is consumed and more of passengers’ valuable time is saved. Customers Personnel Operations Society first airlines to provide verified emissions information to authorities in 2010, and has been prepared for the EU emissions trading scheme which came into force on January 1, 2012. We continue to work for the speedy establishment of a much fairer – and more ecologically sound – global emissions trading scheme through international aviation bodies. Air transport leads the charge in energy efficiency Overall Cars Trucks and light vehicles Air transport 110 100 90 80 70 60 1990 1994 1998 2002 2006 2009 Source: EU European Environment Agency, December 2011 This chart shows the progress in energy efficiency in the EU transport sector since 1990 as measured by the Energy Efficiency Index of Industry (ODEX), a weighted average index used by the EU’s European Environment Agency. It illustrates how aviation has been leading the way in fuel efficiency – the effect of the three pillars in action - operative measures, infrastructure improvements, technological improvements. IV. Positive economic measures Although fuel efficiency and environmental responsibility are fundamentally cooperative enterprises, a little competition is definitely healthy. A global emissions trading system, putting airlines on a level playing field no matter where they fly and no matter where they are based, would help reduce emissions where the other three pillars cannot, and also reward those airlines that take proactive steps to put themselves ahead of the curve in fuel efficiency. Finnair was one of the For the transport sector, the ODEX is calculated out at the level of eight modes or vehicle types: cars, trucks, light vehicles, motorcycles, buses, total air transport, rail, and water transport. The overall energy efficiency index aggregates the trends for each transport mode in a single indicator for the whole sector. ODEX is set at 100 for a reference year and successive values are then derived for each year t by the value of ODEX at year t-1 multiplied by It /It -1. For more information on ODEX and the methodology behind this chart, see: http://www.eea.europa.eu/data-and-maps/figures/energy-efficiency-progress-in-transport-2 GRI 29 / 84 Contents Introduction Customers Personnel Operations Society flight level for fuel efficiency rises as the aircraft uses fuel and lightens. Climbing to reach that level at the right place and time saves fuel, as does making adjustments in speed or routing according to wind, temperature and traffic conditions. Here, the cost-index component in the computerised flight management system can help calculate the best suggestions for adjustments. Before preparing to land, it’s important to calculate the optimal point for the start of descent. An uncongested air traffic situation enables a Continuous Descent Approach, which means we avoid levelling off and increasing thrust unnecessarily. Keeping the aircraft in “clean” configuration – that is, without flaps, spoilers or landing gear – for as long as reasonably possible reduces drag and noise and improves fuel economy. After a safe landing, vacate the runway from the intersection nearest to the arrival gate, if Air Traffic Control permits. If the tarmac isn’t slippery and the aircraft is light enough, you can also shut down engines that are no longer needed. Finally, once we’re at the gate, we can switch back to ground cable power instead of the plane’s own Auxiliary Power Unit. These might seem like little steps, but when every kilogram of fuel accounts for 3.15 kilograms of carbon emissions, they definitely add up over the course of millions of kilometres. The result is substantial savings in both fuel and emissions. Jussi Ekman Green thoughts on a blue sky Jussi Ekman Captain Although flying is done under strict rules, a single flight crew can do a lot for the environment and fuel economy. Sometimes we can make a difference even before getting in the cockpit. During the flight planning stage, for example, in favourable conditions we can minimise the carriage of extra fuel by calculating gross weights accurately, planning for the most likely runways, optimising the cruising flight level and choosing alternate airports close to the destination. While we’re still on the ground, using electrical cable power instead of the aircraft’s own Auxiliary Power Unit can also save fuel. So can loading cargo and luggage toward the aft of the aircraft within approved limits, for the optimum centre of gravity. Most important of all, however, is an on-time departure. A late start makes it much more difficult to make substantial fuel-saving adjustments later on in the flight. When taking off, it’s best to point toward the destination if Air Traffic Control allows, wind is within acceptable limits and taxi time isn’t too long. It’s also important to use the optimum flap and thrust setting, as most take offs don’t need maximum thrust. Switching the air conditioning off during high takeoff thrust is also a good idea, as long as it’s switched back on immediately after taking off, of course. Once we’ve levelled off and are on our way, the optimum GRI 30 / 84 Contents Introduction Customers Personnel Operations Society GRI The future of biofuels Paul Nash Head of New Energies at Airbus In the summer of 2011, American restaurant patrons probably had no idea they were helping bring about a greener aviation industry. But on July 20, using SkyNRG biofuel processed from used cooking oil in the United States, Finnair flew the longest commercial biofuel flight to that date, from Amsterdam to Helsinki. We still have a long way to go before the economics of biofuels enable their everyday use, however. Paul Nash, the Head of New Energies at Airbus who has also worked closely with Finnair on its biofuels activity, explains more. How do biofuels work? Aviation biofuels work exactly the same way as ordinary fossil fuels do. They have the same characteristics in terms of flash point, freeze point, energy density, and are approved for commercial use by the same organisations. Biofuels are cleaner in that they produce less sulphur and other particulates when they are burned. The most important difference for the environment, however, is that when you grow the biomass used to make biofuels, that material absorbs carbon dioxide. This means that while direct CO2 emissions from biofuels are more or less the same as those from conventional fuel, their overall contribution of CO2 to the atmosphere is significantly less. And as purely “drop in” solution, they require very little change in complex airport and fuel delivery infrastructure. How much CO2 in the atmosphere can biofuel save? Simple question, difficult answer. It depends on which biomass you use, such as camelina, jatropha or sea algae, and it depends on which transformation process you use. Most people talk about between 50 to 60 per cent in savings, sometimes even as high as 80 per cent. At Airbus, we target at least 50-60 per cent savings with biofuel. Are some biomasses more sustainable than others? What about palm oil, for example? At Airbus we do not become involved in any project where the feasibility study does not show a sustainable solution in terms of impacts on land, food and water. We currently use the Roundtable on Sustainable Biofuels (RSB) standards to structure our approach to sustainability. We also believe that we do not currently have the perfect solutions, and different feedstocks and transformation processes will be used in different locations around the world, resulting in local jobs for local people. Overall, you have to consider if the feedstock in question competes with food, and what that feedstock’s impact is on land and how the land would be used otherwise. Right now, biofuels cost about three times what ordinary jet fuel costs. Fuel already represents about 25 percent of Finnair’s cost base, and at those prices any airline would very quickly go out of business. When and how could the price come down? Obviously the more the price of fossil fuel goes up, the closer we’ll get to parity with the price of biofuel. But on the biofuel side, it comes down to policies, incentives, and how we’re able to lower prices by scaling up. You also need a strong level of public confidence, by not encroaching on arable land, food production, or biodiversity. Otherwise investors and the public won’t accept it, for good reason. Lots of Paul Nash 31 / 84 Contents Introduction things have to come into play before parity with oil is reached. If you were to ask me personally how long that will take, I would say probably around 10 to 20 years – unless you have concerted public policy that spurs faster development, now. Can you tell us more about the development of the biofuel supply chain? In partnership with the European Commission, biofuel producers, and many airlines including Finnair, Airbus has helped launch the Biofuel Flightpath, a program that targets an annual production of two million tons of biofuel fit for aviation use by 2020. The plan is to build nine biofuel refineries in Europe over the next eight years, using multiple feedstocks and multiple transformation processes. That would go a long way toward speeding up the commercialisation process. Presently, however, virtually all of the public policy and public incentives around biofuels are geared toward making biodiesel, fuel for the automotive industry, rather than biokerosene for aviation. This is understandable, given that motor transport represents about 80 per cent of fossil fuel usage in the transportation sector, while aviation is about 12 per cent. But with automobiles, non-biofuel green technology such as hydrogen fuel cells, hybrid and electric cars can and are being implemented on the road now. In aviation, on the other hand, the lifecycle of aircraft is much longer and the ground infrastructure is much less flexible. We have to work with the planes and airports we already have, while we continue to work on the next generations of aircraft and infrastructure. Biofuels will really be our only option for the next 30 years or so. Long term, is a zero-emission passenger aircraft technically feasible? In the long term, it could be possible. A lot has to happen first, of course, but in the past 40 years, Airbus’s aircraft have increased fuel efficiency and reduced emissions by 70 per cent. We have joined the Customers Personnel Operations Society rest of the aviation industry in committing to carbon-neutral growth by 2020 – i.e., we halt net increases in CO2 emissions that year and level off. By 2050 we are committed to a 50 per cent reduction in overall emissions from 2005 levels. Those are ambitious targets and no other industry does this. If we just did what we have been doing in the past, however, we won’t reach those targets. It won’t be enough. That’s why the industry generally is making such a big push on improving fuel efficiency, not just in new generations of aircraft but by operational means and with improvements in air traffic management, for example. Better efficiency in air traffic management alone can knock up to ten per cent off of today’s level of emissions. Technology is just one of the four pillars of fuel efficiency (see The four pillars of fuel efficiency). But to address the technology aspect, the aviation industry has looked at fuels that would have zero emissions like hydrogen. If you wanted to introduce hydrogen fuel on aircraft, you would need three times the volume to store the energy. You would then have to change aircraft design fundamentally, as well as create a whole new global infrastructure of fuel delivery and ramp, runway and gate facilities at airports. Moreover, hydrogen doesn’t occur naturally, so you’d have to make it synthetically. At the moment, nearly all hydrogen is produced using fossil fuels, which of course would defeat the whole purpose. Hydrogen fuel-cell systems based on sustainably produced hydrogen are more promising in the near term, when used for auxiliary power on the ground. That would help airports become much quieter and cleaner. But using them for flight itself is a very long-term prospect. Electrically propelled aircraft are another option; in 2011, an experimental two-seat zero-emission aircraft called the eGenius had a successful test flight. But large passenger airliners running only on electricity are a long way off. So yes, a zero-emission, everyday commercial aircraft is feasible and achievable, but it will take time. That’s why we need biofuels now. GRI 32 / 84 Contents Introduction Customers Personnel Operations To recycle or not to recycle? In 2011, Finnair Catering generated some 3,380,900 kilograms of waste, of which fully 57 per cent was reutilised, meaning it was either reused as material or burned for use as energy. EU regulation concerning animal by-products limits the possibilities to recycle much more, however. Under laws governing waste handling in EU countries, all waste originating from outside the EU that is of animal origin, as well as any material that has come in contact with it (for example, packaging material), must be buried permanently in an approved landfill or burned in a special incineration process. This means that more than one million kilograms of animal-based catering waste, originating from various destinations outside the EU, entered the waste stream and were forbidden from being reutilised in 2011, at considerable cost both to the environment and to Finnair. The directive is designed to reduce the risk of potential sources of infectious diseases affecting livestock or humans from entering the EU. Even so, all of Finnair’s catering partners at stations abroad, both inside and outside of the EU, are subject to the same, globally stringent hygiene and food safety standards as Finnair Catering itself, and they typically also have systems in place that are virtually identical to those at Finnair Catering and other European catering facilities. Partner facilities are also subject to frequent audits to make sure all hygiene standards are being exceeded. According to the law, however, non-EU catering waste will have to continue entering the waste stream. EU regulations limit the possibilities to increase the recycling percentage of catering waste Society GRI 33 / 84 Contents Introduction 05 Society The right way to trade emissions .............. 35 Making strides in carbon reduction.... 38 Trends in sustainable tourism....................... 39 Finnair in the world.......................................................... 40 Creative livelihoods in India.............................. 43 Out with the old, in with the old.................44 GRI indicators: EC1–9; EN11–29; LA8; HR1–2; HR6–9; SO1–8; PR1–9 Customers Personnel Operations Society GRI 34 / 84 Contents Introduction Customers Personnel Operations Society GRI The right way to trade emissions Erno Hildén Chief Financial Officer A lot is said about the merits of carbon emissions trading and other forms of environmental taxation, but the ultimate point, it must be remembered, is to reduce emissions. That’s it. By putting a price on carbon, businesses are given a bottom-line incentive to require the least amount of carbon emissions as possible for their operations. In Finnair’s view, the buying and selling of carbon permits is a dynamic, market-based solution to the problem of how to precisely account for – and reduce – a company’s negative external costs such as pollution, without resorting to the blunt instrument of blanket taxation. It’s a practical and attractive idea. And yet when it comes to airlines, the ultimate objective of reducing emissions somehow seems to fade from the horizon when we get into the particulars of environmental taxation and emissions trading. To begin with, in the airline industry there is already a premium on carbon – and it is steep. Fuel alone accounts for about 25 per cent of Finnair’s annual cost base, and every drop of fuel saved thanks to various fuel-efficiency measures and investments in a modern, more fuel-efficient fleet makes a real difference to our financial bottom line. It also makes a big difference for the environment, as one kilogram of fuel accounts for 3.15 kilograms of CO2 emissions. With or without emissions trading, in other words, we have a very palpable incentive to emit less. Indeed, our emissions per seat since 1999 have already decreased by about a quarter, and we are on track to meet our target of a further 24 per cent reduction by 2017. It’s a good thing, too: In recent times escalating fuel costs have been the primary reason for a number of well-respected airlines being forced out of business. Their grim example is a harsh reminder that we are in a pitiless race to keep fuel consumption in check and emissions as low as possible. Better than outright taxation Even so, Finnair remains in favour of emissions trading to help reduce emissions. Aviation accounts for about 2 to 3 per cent of global carbon emissions, and if nothing else is done, that number is expected to climb as worldwide demand for flying increases rapidly. The greenhouse gases that airlines are responsible for emitting are real, and it’s only fair that this negative externality is somehow accounted for and reduced. It’s also important that the airlines which proactively take steps to reduce emissions ahead of the rest of the industry enjoy a greater competitive advantage over those who do not. That is a powerful incentive for all players in the sector to speed up development of supply chains and technologies that can produce significant carbon savings that also outpace growth in overall air traffic. Indeed, partly in response to growing air traffic, governments are increasingly taxing airlines outright for their environmental impact. The UK, for example, has for several years used an explicitly environmental Air Passenger Duty that in 2012 is projected to generate some four billion USD in tax revenue for UK authorities. But the duty is proving to be problematic as an environmental measure. Except insofar as it may slightly reduce the number of people willing to pay the taxes required for flying to and from Britain, it is unclear how this revenue actually helps concretely reduce emissions. Erno Hildén 35 / 84 Contents Introduction As a taxation mechanism based on passengers and distance, rather than on what airplanes actually emit, the tax is aimed at the wrong target. Passengers flying airlines that operate older, less efficient aircraft are charged exactly the same tax as those flying in newer, more efficient planes. There’s very little incentive, in other words, for airlines to go above and beyond what they already do when it comes to fuel efficiency. Worse still, the funds collected from the duty are not invested in developing the greener technology and infrastructure that really could make a measurable difference in emissions sooner rather than later. The tax revenues simply enter general public funds. An emissions trading system, by contrast, precisely rewards the airlines that invest in fuel efficiency, and makes operating costs even higher for those that do not. The relationship between environmental impact and cost is direct and clear. More importantly from the climate point of view, emissions trading stimulates even more demand for fuel efficiency and greener technology industry-wide, as all airlines rush to catch up with their more efficient competitors. And if proceeds are reinvested into reducing emissions, that only helps boost the development of green technology and infrastructure sector-wide. A global problem with a global solution But for the system to work, first and foremost it needs to be a global enterprise. This is a global industry and the emission of greenhouse gases is a global problem. It demands a global solution. Unfortunately, in this regard our industry has not always helped itself as much as it could have. After climate change talks in Kyoto in 1997, ICAO (the UN’s aviation body) was given a mandate to develop and implement a global emissions trading scheme. But the diverse nations with diverse Customers Personnel Operations Society interests in ICAO have not been able to agree, and 15 years later, we are still waiting for that global scheme. The European Union’s Emissions Trading Scheme, which was extended to airlines effective January 1, 2012, was in part an exasperated reaction to the failure of the global aviation community to agree on an emissions trading platform. The EU’s decision to forge ahead unilaterally may be understandable, but it also raises questions. Aside from looming threats of retaliation measures from the US, China, Russia and other powers, the effect on emissions themselves is unclear. With a regional trading scheme, emissions may very well decrease inside the trading zone but, as airlines seek ways of routing aircraft around the zone, flight plans become longer and overall global emissions increase, creating so-called “carbon leakage”. Moreover, since the revenues from the scheme cannot be earmarked in most EU countries for reinvestment in green technology and infrastructure, an opportunity to concretely reduce greenhouse gas emissions is wasted. Meanwhile, if other territories go ahead with their own trading schemes, as for example Australia has promised to, a patchwork of different systems – each controlling emissions differently and advancing different economic interests and principles – clouds and even imperils the overall objective of reducing emissions. The importance of aviation and the quest for a global deal Finally, as European airlines’ cost burdens rise under the EU ETS – in Finnair’s case, by about five million euros in 2012 – their competitive positions weaken, as it may not always be possible to pass on the extra cost to customers on certain routes where competing airlines have the option of avoiding the trading zone. However it is Europe’s smaller, GRI 36 / 84 Contents Introduction primarily domestic airlines that, thanks to how the carbon permits are allocated, will weaken more than average, causing increases in costs and negatively affecting internal air service in regions throughout Europe. In Finland, a geographically isolated country with long distances between urban areas, this is especially troubling. Comprehensive and effective international flight connections are a critical competitive factor for companies investing in the export and tourism industry, and contribute to the equal development of all regions within the country. These difficulties only underline the importance of the quest for a global emissions trading scheme. For several years we have pushed for coordinated, international emissions trading through AEA, IATA and the Aviation Global Deal Group, and progress has been slow but real. The good news is that the EU authorities have said that they too agree on the principle that a global scheme would be better. ICAO, for its part, has said it is accelerating its work to establish a global emissions trading scheme by 2013. It would seem a lot of minds must be changed first, but early signs are encouraging. It is our hope that 2012 will be remembered as the year when all players in the airline business, from every region, saw the wisdom of coming together to trade emissions and live up to the “fourth pillar” of sustainable aviation that, in principle, all players have already agreed on for several years now. Customers Personnel Operations Society GRI 37 / 84 Contents Introduction Customers Personnel Operations One of the highlights of Finnair’s sustainable development in 2011 came in October, when the Carbon Disclosure Project, operator of the world’s only global climate change reporting system, commended Finnair for its efforts to substantially reduce greenhouse gas emissions, improve reporting capabilities, and recognise the strategic business risks associated with climate change. In the CDP’s Nordic Report 2011, Finnair scored higher than any other airline in the Nordic region. When reports from other regions were published later in the year, Finnair emerged as the top openly reporting airline worldwide for emissions reduction. Earning a score of 78 out of 100, Finnair improved on its 2010 score of 61. A score greater than 70 puts a company in the CDP’s “high” category of climate change-aware firms. In such companies, CDP explains, “senior management understand the business issues related to climate change and are building climate-related risks and opportunities into core business.” Performance indicators such as this are good news for the environment, but they also put Finnair in a strong competitive position as increasing numbers of consumers come to expect greener flying and momentum gathers for a global emissions trading scheme. uusi Making strides in carbon reduction Finnair Fuel consumption 1999–2017 litres/seat/100km 4 3 2 1 0 1999 2009 2017 Society GRI 38 / 84 Contents Introduction Customers Personnel Operations Society GRI Trends in sustainable tourism Kaisa Vikkula Senior Vice President Travel Services For Finns looking for a break from a long winter, the leisure travel business may be mostly about the “three Ss” – sea, sand and sun – but as tourists and tour operators, we are all guests. And no matter what else we do, an irresponsible guest is ultimately an unwelcome one. A mutually beneficial encounter between tourists and the local economy and environment is critical. That’s why Aurinkomatkat-Suntours, Finnair Group’s outbound leisure tour operator, joined the Tour Operators Initiative for Sustainable Tourism Development shortly after the organisation’s formation in March 2000. This pioneering group of tour operators, supported by the World Tourism Organisation, UNEP and UNESCO, was founded to share and spread sustainable tourism management practices and helps tourism companies build their business on a sustainable foundation. In practice, this means that Aurinkomatkat – which is not in the accommodation business itself – works mainly with locally-owned hotels at its destinations, so that the wealth generated from tourism in the area stays in the area. As with other partners in the supply chain, our contracts with hotels are also subject to environmental criteria as well as consideration of local social and cultural factors. When locals prosper from tourism infrastructure and are happy to see us when we arrive, customers win and our tour operator business is free to grow and thrive. Because we also offer customers their own choice of accommodation, since 2006 Aurinkomatkat has been publishing its own classification of leisure hotels’ sustainability. A participating hotel can earn either one, two or three “drops of water” in our visual classification scheme, depending on the environmental sustainability measures the hotel has adopted. Out of some 800 hotels in our portfolio, nearly 90 per cent now have an environmental classification, which helps customers make an informed choice about their holiday and in turn encourages hotel operators to make sustainability a competitive factor for them as well. While managing the supply chain is a key structural feature of how a tour operator builds its business sustainably, ultimately it is the customer and the choices the customer makes that count the most toward a responsible encounter between host and guest. We take the first step together with the customer, and educate them about their destination’s environment and local customs so that they can better enjoy their holiday responsibly. In addition, at several of our destinations we have undertaken local charitable projects with direct local contacts (see examples in the GRI section, indicator SO1) with which customers can get involved, should they wish to. From turtles in Greece to elephants in Thailand to social development in Mexico, our visit can have a positive, even profound impact, even though we come primarily to relax. When our presence fosters both economic prosperity and respect for local society, culture and ecology, we ensure that places worth visiting now are worth visiting again long into the future. Sustainability may not necessarily be the first thing on one’s mind when booking a break in the sun, but in the long term, the tourism business is unthinkable without it. Kaisa Vikkula 39 / 84 Contents Introduction Finnair in the world The Finnair Group is primarily in the airline business, of course, and as we have seen in the previous chapters of this report, the bulk of the company’s sustainability projects are aimed at developing the long-term sustainability of its core business. But no company is an island. Where we have an opportunity to effect positive change outside our core activities, we believe it is worth pursuing, especially if we can also make it easy for customers to do the same as well. From Madagascar to Japan to our own doorstep on the Baltic Sea, charitable projects can help make a real difference for the wider circle of shared prosperity around Finnair and its customers. Plant a tree in Madagascar Finnair is taking part in a development cooperation project in Madagascar launched by the Finnish Association for Nature Conservation (SLL). The purpose of the development project is to create an effective reforestation program in the environment of a 1,500-inhabitant village community. The project area suffers from severe deforestation, as a consequence of which natural diversity and the life-maintaining activity of the ecosystem have been seriously weakened. By donating points, Finnair Plus members can fund the planting of one or more trees in a forest within the project area. For example, with a donation of 1,000 points the Finnair Plus member can participate in the planting of three tree seedlings. One tree is directed towards the restoration of the natural forest, another to the villagers’ utility wood forest, and a third to nutritional production (fruit trees). Customers Personnel Operations Society GRI 40 / 84 Contents Introduction Through the planting of seedlings, SLL ensures that reforestation succeeds in a sustainable way in cooperation with the local community. The progress of reforestation is monitored using a satellite system. Finnair and SLL have engaged in long-term cooperation for many years, for example in waterways protection and the promotion of natural diversity. Points for little patients The Association of Friends of the University Children’s Hospitals is a charity that helps children with serious illnesses in Finland. In a geographically large country with a relatively sparse, thinly spread population, Finnair helps arrange flights for patients between specialist clinics and their often far-flung home cities. Finnair has partnered with the Friends of the University Children’s Hospitals since 1995 and since the beginning of 2010, all Finnair Plus customers have also had the opportunity to donate their bonus points to benefit patients. Cancer Foundation’s Pink Ribbon campaign In 2011 Finnair began participating in Pink Ribbon work to promote breast cancer research and improve the provision of advice and information for patients and their relatives. The objective was to collect funds for the Pink Ribbon Fund and to increase awareness of breast cancer. Finnair’s customers are able to participate in this work as well by donating for example Plus points to the cause. Customers Personnel Operations Society Helping the Japanese Red Cross Since the earthquake and tsunami last spring in Japan, Finnair Plus members have been able to give their Plus points to the Japanese Red Cross, in donation increments of 3,000, 5,000 or 10,000 points. For example, with 3,000 points disaster victims received a blanket and a water canister or 5 kilos of tinned food, and with 10,000 points more than 100 kilos of rice. The co-operations has since then expanded to cover Red Cross disaster relief in general. A cleaner Baltic Sea All Finnair Plus customers have the opportunity to donate their bonus points to support the Baltic Sea Action Group. So far, almost 400,000 points have been donated. The funds will be used to obtain surface oil dispersal booms to protect the Baltic Sea. Environmental education Finnair also supports Environment Online (ENO), a global virtual school and network for sustainable development founded in Finland in 2000 and currently operating in about 7,000 schools in more than 100 countries. The organisation has set a goal to plant 100 million trees by the centennial of Finland’s independence in 2017, and has already mobilised school classes in countries such as Brazil, Indonesia and Malaysia to plant millions of trees. In September 2011, ENO organised Act Now!, an environmental conference that brought hundreds of students and teachers to Joensuu, Finland to take part in discussions, workshops and other activities. Finnair sponsored the event by flying conference coordinators to Finland. GRI 41 / 84 Contents Introduction Humanitarian cargo In partnerships with the Red Cross and the Finnish Refugee Council, Finnair Cargo provides humanitarian assistance in natural disaster and conflict zones. After earthquakes in Sichuan and Haiti, Finnair delivered medical equipment and funded the construction of infrastructure. When the 2011 tsunami and earthquake struck Japan, baby formula and other supplies were sent to affected areas. Some 2,000 blankets have also been donated for use by Burmese refugees in Thailand. Change for Good UNICEF’s Change for Good has been a popular holiday-season charity campaign of many oneworld airlines since the alliance’s founding in 1999, and of Finnair since 1994. Through the project, which enables passengers to donate their leftover change in foreign currencies, Finnair has collected more than one million euros for UNICEF. In the latest iteration of the campaign, Finnair’s international passengers donated about 60,000 euros over the six-week period from November 28, 2011. At any time of year, Finnair Plus customers can also donate their points to UNICEF Finland. Customers Personnel Operations Society GRI 42 / 84 Contents Introduction Customers Personnel Creative livelihoods in India Finnish company Tikau (“sustainable” in Hindi) has been training Dalit villagers in Orissa, one of India’s poorest areas, to produce designer home products for Scandinavian markets. The project, instigated by Tikau’s founder and director Taina Snellman and using bamboo as a sustainable raw material, gives dignity and a source of creative livelihood to the villagers. Finnair helps Tikau by flying clothing and toys, including discarded old-issue in-flight blankets and games, to India, which Snellman and her colleagues distribute to villagers. “It’s all about giving the Dalits human dignity and giving them an alternative and productive way of making a living,” says Snellman. Dalits are the “untouchables” of Indian society, at the very bottom of India’s caste system that was supposed to have been outlawed in 1950 but which is still very much an influence in the country. The village in Orissa is one of several poor communities in India where Tikau runs workshops for the baskets, lamps, mats and other items sold in its Helsinki boutique and also available through the Finnair Plus Shop. The challenges faced by Tikau and its NGO, Tikau Share, in getting production going in this Dalit community, whose members are excluded from mainstream India in almost every way and often regarded with disdain, are especially strenuous. But the Tikau group in Orissa is open to non-Dalits too – although new members must be approved by a member vote. “For this project to be truly sustainable, it has to stand on its own two feet,” says Snellman, stressing that Tikau is about helping poor people to help themselves and not just providing charity. Tikau Share, meanwhile, is bringing home its experience in sustainable design for the program of World Design Capital Helsinki 2012. Design Helps Living Room, opening September 2012, will be an exhibition, seminar and café space where design products, concepts, and ideas for well-being can be shared and debated. The program supports the construction of a community centre in the Orissa village. Operations Society GRI 43 / 84 Contents Introduction Customers Personnel Operations Society GRI 44 / 84 Out with the old, in with the old Since 2010 Finnair has been renewing its visual identity, from the company logo and aircraft livery to the appearance of the cabins and uniforms. But the materials in old banners, seats, curtains, blankets, uniforms and other items aren’t going to waste. They’re just taking another step on the value chain. One partner in this process is Uusix, a group of Helsinki-based workshops that find new uses for old clothing, metal items, furniture and other discarded items. About two thirds of the workers at Uusix, affiliated with the City of Helsinki’s social services department, are individuals who have trouble finding employment. The workshops also collaborate with students at Aalto University on new designs and concepts, and some Uusix-produced items are sold in shops in the Helsinki Design District. Another “upcycling” partner is the Finnish company Globe Hope, which makes clothes and accessories from second-hand materials according to the principles of “ecology, ethics and aesthetics”. As part of ongoing cooperation with Finnair, Globe Hope’s range makes use of discarded and discontinued but hardy and durable in-flight materials. “When the uniforms were changed to a new style, the old ones were shipped to us,” explains Globe Hope CEO Seija Lukkala. “We have now been transforming them into new designs. As the uniform fabrics are of very good quality, they’re perfect for at least another round of use. We’ve turned them into dresses, tote bags and purses, to mention a few items. The products have turned out great and they all have a special story.” Globe Hope exports its products to nine European countries, Japan and the USA. In Finland the company’s products are sold at more than 100 retailers around the country, including two of its own brand shops in Helsinki. This children’s bathrobe, produced by Uusix, was once a Finnair blanket Globe Hope fashions new uses for Finnair’s discarded fabrics Contents 06 GRI Economic responsibility Introduction ............................................ 48 Environmental responsibility............................51 Social responsibility.......................................................... 61 Customers Personnel Operations Society GRI 45 / 84 Contents Introduction Customers Personnel Operations Society GRI 46 / 84 Corporate responsibility This is Finnair’s fourth corporate responsibility report. The report outlines the work done at Finnair in 2011 in all of the subareas of corporate responsibility. Reporting principles Finnair was one of the first airlines in the world to communicate its corporate responsibility issues by applying the Global Reporting Initiative (GRI) reporting framework. Finnair’s corporate responsibility report has been compiled in accordance with the GRI’s G3 Guidelines. In addition to the parent company, the report covers subsidiaries and business units that support flight operations in Finland as well as the group’s subsidiaries that provide and sell travel services in Finland. The Finnair Group does not report on the operations of foreign subsidiaries, because as minor operators they are deemed not to be of key significance in terms of the group’s corporate responsibility issues. Possible exceptions to this are mentioned separately in connection with each key figure. The Finnair Group, moreover, does not report on outsourced operations. Finnair Technical Services, which belonged to the parent company, was divided at the beginning of 2010 into two subsidiaries, Finnair Technical Services Oy and Finnair Engine Services Oy. Higher-level administrative structures are, however, the same in both companies and they are dealt with in this report as one entity, Finnair Technical Services. This approach is justified by the fact that the operations of both technical services subsidiaries are the repair and maintenance of aircraft and their components, and for this reason their corporate responsibility aspects are convergent at the group level. Information sources, measurement and calculation methods The information of the report has been collected from the group’s internal statistics systems and also from various subcontractors. In terms of measurement and calculation methods, the GRI G3 calculation guidelines have been adhered to whenever the available data have so allowed. If some other measurement or calculation method has been used, this is mentioned in connection with the key figure concerned. The figures have been presented in time series when this has been appropriate and reliably possible. Figures on economic responsibility are mainly derived from the financial statements. Other information with respect to economic responsibility is derived from the group’s various operators. Finnair’s largest single material cost item is jet fuel. In this report, jet fuel is treated, however, as energy, because in terms of its purpose and environmental effects it is sensible to understand jet fuel as stored energy. Fuels are also reported on the basis of their mass and volumes. In terms of flying, emissions values and fuel consumption figures are derived from the company’s own monitoring systems and based on actual consumption. Because Finnair has prepared for the EU emissions trading system, the emissions calculations are also verified by an external party. In relation to material streams, amounts of waste, and energy consumption of properties, data have been obtained from service providers, goods suppliers and on the basis of invoices paid. With respect to Finnair Technical Services, environmental data are also obtained from monitoring and measuring systems required by their environmental permits. In terms of Technical Services’ use of materials, only chemicals are reported, because the statistical practice of raw materials and spare parts does not allow a comparable way of presentation. Finnair Technical Services is not, however, a significant user of raw materi- als, and its main environmental aspects relate to storage and use of chemicals. Finnair Catering Oy has an ISO14001-certified environmental management system, within whose framework Catering monitors certain variables very closely. In addition, the travel agency Area’s head office has a Green Office certificate awarded by the WWF, within whose framework certain environmental parameters prescribed for the company are monitored effectively. Information on personnel comes from Finnair’s HR information system and from parties responsible for the wellbeing of employees. Accident statistics are obtained from the insurance company and they are updated retroactively, as a result of which the 2011 figures may be subject to further adjustment. Information relating to human rights and local communities are derived from procurement agreements, from personnel responsible for procurement, subcontractors and, in terms of the impact of tourism, mainly from Aurinkomatkat-Suntours, which as a tour operator occupies a key position in this respect. Operational conformity with laws and regulations has been confirmed with the group’s Legal Affairs department. Customer satisfaction data, on the other hand, are based on customer satisfaction surveys and on feedback received by the group. Accident frequencies are reported according to GRI requirements, but GRI-compliant statistical data on illness and other absences are not yet available. Effect of any re-statements of information provided in earlier reports There have been no changes in the methods of data collection and calculation used for social indicators compared with the 2010 report. For environmental performance indicator EN1, the data on the use of propylene glycol, and chemicals used by Finnair Technical Services, is reported more accurately than in last year’s report. More information on this is provided under the section on the indicator in question. A new addition to this year’s reporting are data on the fuel consumption and CO2 emissions attributable to transport capacity purchased by Finnair Cargo from other airlines. There are no other changes to data collection or calculation principles for environmental indicators compared to the previous report. Changes pertaining to the group’s organisational structure and the calculation of the financial statement data are described in more detail in Finnair’s Financial Report. Reporting priorities The structure of the 2011 report has changed from that used in previous years. Finnair has discontinued the Logbook format of its annual report and, as a result, important themes are now discussed more broadly in the form of articles in this Corporate Responsibility Report. This report comprises the following sections: • General overview of Finnair • Customers • Personnel • Operations • Society • GRI indicators Our corporate responsibility report covers all elements of corporate responsibility. From an environmental standpoint, the Finnair Group’s overwhelmingly most significant function is flying. According to some estimates, 95 per cent of the sector’s total environmental impacts arise from flying. The environmental load from flying comes mainly from engine emissions and Contents particularly from the use of fossil fuels. On a global level, aviation causes around 2-3 per cent of the world’s humanderived carbon dioxide emissions. The significance o f flying is also highlighted in the reported key figures. Other important aspects at group level are material streams and waste issues. Individual business units and subsidiaries naturally have their own particular environmental aspects, but over the group as a whole these are marginal compared with flying. A number of these have, however, been included in the report. In terms of social responsibility, the report highlights key figures relating to the group’s personnel. Aviation and its support functions are very labour-intensive sectors. Finnair is a significant employer in Finland. In many respects, high special expertise is required of personnel, so competent, satisfied and motivated employees are vital for Finnair. For these reasons, personnel issues are covered widely and comprehensively in the report. Finnair’s second important interest group naturally consists of its customers, so special attention is also paid in the report to customer relationships. The third key social responsibility aspect in terms of the impact of the group’s activities relates to tourism. Tourism is one of the biggest industries in the world, and it has a huge impact on local communities. In the Finnair Group, subsidiaries that provide and sell travel services form an important interface between the group and local communities at tourist destinations. Because the social impacts of tourism are difficult to measure in a universal way, they are not addressed here numerically but qualitatively. With respect to economic responsibility, the emphasis is on ensuring profitable business operations. In the long term, only a profitable company can generate wellbeing for society and its interest groups. This sometimes means painful decisions. The economic significance of regular, efficient air transport for a geographically distant country like Finland is substantial. In terms of Finland’s economic life and political activity, efficient flight connections to many important destinations are essential and constitute part of the infrastructure of trust and international interaction. Finnair is also a significant employer and taxpayer. Introduction Customers Personnel Operations Society GRI 47 / 84 Reported business units and subsidiaries FINNAIR GROUP Operating segment Business unit/subsidiary Included in report AIRLINE BUSINESS Airline Business X Finnair Cargo Oy X Finnair Cargo Terminal Operations Oy X Finnair Aircraft Finance Oy and FAF subsidiaries X Finnair Technical Services Oy X Finnair Engine Services Oy X Northport Oy (ground handling) X Finnair Catering Oy X AVIATION SERVICES - Finncatering Oy TRAVEL SERVICES OTHER FUNCTIONS No Finnair Facilities Management Oy X Oy Aurinkomatkat - Suntours Ltd Ab X Justification Subsidiary of a subsidiary. Connected with flight operations only as a producer and supplier of inflight meals; in that respect it is reported under Finnair Catering’s figures. - Horizon Travel No Foreign subsidiary of a subsidiary (travel agency) - Calypso No Foreign subsidiary of a subsidiary (travel agency) - Takeoff/Matkayhtymä Oy No Subsidiary of a subsidiary. No actual operations at the moment Finland Travel Bureau Ltd. (FTB) X - A/S Estravel Ltd. No Area Travel Agency Ltd. X Amadeus Finland Oy X Group Administration X Joint functions X FTS Financial Services Oy X Back Office Services Estonia Oü, Estonia X Finnair Flight Academy Oy X Foreign subsidiary of a subsidiary (travel agency) Contents Introduction Customers Personnel Operations Society GRI 48 / 84 Economic responsibility Vision Finnair is one of the world’s most innovative, safest and longest-operating airlines. The company’s focus is on flights between Asia and Europe and its vision is to be the number one airline in the Nordic region and the most desired alternative for Asian routes. Finnair also aims to be in the top three in via-traffic, i.e. where there is no direct connection, between Europe and Asia. Finnair’s growth strategy is based on the growing Asian market, the fastest flight connections and cost-competitiveness. Finnair took significant steps in implementing its strategy and developing its operations in 2011. In 2011, Finnair focused on optimising operations, growth and service quality. The opening of the Singapore route and preparations of the Chongqing route to be opened in May 2012 are steps toward the envisaged doubling of the turnover of Asian operations by 2020. In order to improve cost competitiveness, Finnair will focus on its core activities in the future and build an even stronger partnership network. The strategic focus of Finnair’s airline traffic is on the traffic between Asia and Europe, and for this reason, in addition to increasing Asian traffic, the company aims to develop alternative ways for producing the company’s own narrow body traffic in order to reduce the unit costs of European and domestic traffic and to increase flexibility. Finnair is aiming to achieve a leading position as a Nordic operator in cooperation with its partners in order to produce additional value for its shareholders and customers. Finnair’s objective is to create sustainable economic added value by producing flight services profitably, cost-competitively and in harmony with the needs of the environment and society. Responsible operations are the cornerstone of profitable business activity. Economic operating principles As a public limited company, Finnair is committed to earning a profit for its shareholders. The company’s profit distribution principles are expressed in Finnair’s dividend policy. Finnair takes into account the effects of its operations and financial decisions on the environment and society. These effects are identified and assessed by the company’s corporate social responsibility and risk management organisations, which work under the authority of the CEO. In addition, it is in the interests of the group’s tour operators to promote sustainable tourism, which benefits local businesses and organisations. Business operations are based on internationally accepted ethical principles governing business partnerships and interest group relationships. The company applies the rules relating to listed companies as well as international financial reporting standards. Finnair’s Board of Directors has set financial targets for the company, which are outlined in material directed at investors. The company’s financial reporting aims to provide, as transparently as possible, information about Finnair’s financial position and development. Economic effects of an airline The airline industry as a sector is very sensitive to cyclical fluctuations in the global economy as well as in national economies. While an airline’s earnings logic is based on people’s need to travel for work and leisure as well as on cargo carriage, it is also part of the infrastructure of the national economies of its operating area. Aviation is a significant industry for Finnish society and the national economy. The accessibility provided by airline traffic is a necessity for Finland’s global competitiveness and its economic impact is considerable; aviation is estimated to account for 3-5 per cent of GDP, employment and tax revenue. Finnair’s effective Asian strategy is a key element of the GDP contribution of aviation and its impact is estimated at 1-2 billion euros. Profitability in a highly competitive industry that is sensitive to cyclical fluctuations requires structural changes, which Finnair, like other airlines, is implementing. During 2011, the company developed Career Gate, a concept to help Finnair personnel find employment as quickly as possible when it is necessary to reduce staff. Significant changes in the company’s operations, deeper alliances and an increase in cost-effectiveness in all operations are required in order to achieve the planned cost reductions. These measures mean big changes to the company’s personnel, and personnel reductions cannot be avoided. Market and general situation Global airline traffic has changed significantly in recent years, and similar structural change is happening in the industry as has already been faced by many other industries. Typical for this change process are market liberalisation, increasing competition, overcapacity, consolidation, alliances and specialisation. The global consolidation of the industry is predicted to continue. Finnair aims to make use of the opportunities created by this development. Finnair’s strategy is to focus on increasing Asian traffic and pursue leadership in the Nordic countries in cooperation with a strong partner network. The significance of the partner network will be emphasised even more, because a small company can no longer do everything by itself. Competition in the industry has intensified so that the continuous improvement of both cost-competitiveness and quality require specialisation and large-scale cooperation. The year 2011 was marked by high oil prices and the increased capacity in the market. In early 2011, the industry was getting ready for expected growth in the markets, due to which supply increased more rapidly than demand. As the global economy weakened, the competitive situation continued to get even tighter, which affected both passenger and cargo traffic. The strong capacity growth in air traffic stabilised in the second quarter due to high oil prices, the uncertainty in the global economy, the disaster in Japan as well as the disturbances in the Middle East and Northern Africa. However, Finnair was able to increase its market share in the traffic between Asia and Europe on the routes it operates. Business travel and the demand for business class also developed positively during the first half of the year. The growth in demand slowed down in the second half of the year due to the uncertainty in the global economy. Increasing macro-economic instability led to a weaker than expected development of business travel and weakened the profitability of cargo traffic. Due to overcapacity in the package tours markets, the operational result of Finnair’s package tours subsidiary Oy Aurinkomatkat-Suntours Ltd exceptionally showed a loss. The high price of oil and the disturbances at the start of the year also weakened the profitability of the company for the whole year, due to which Finnair’s operational result for 2011 showed a loss of 60.9 million euros. Contents Introduction Customers Personnel Operations Society GRI 49 / 84 Economic indicators the setting of emission ceilings to fuel price control mechanisms and even the imposition of direct bans. The jet fuel used by Finnair is currently fossil fuel. Fuel costs are also Finnair’s most significant single cost item. Therefore, all the factors influencing the price of jet fuel also similarly influence Finnair’s operating costs. EC1 Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments Direct economic value, EUR million Consolidated turnover Other operating income Financial income Income, total 2011 2010 2,257.7 2023.3 13.9 20.1 47.8 27.1 9.0 6.5 8.9 22.1 2,280.6 2009 2008 1,837.70 2,255.80 2,049.9 1,894.40 2,305.00 Distributed economic value Cash paid outside the company, Operating costs excluding materials and services, other operating depreciation and personnel expenses expenses Payments to personnel Personnel expenses Payments made to shareholders and loan providers Dividend, euros Interest and other financial expenses Payments to government (taxes) Donations and other charitable payments Distributed, total Economic value retained for operational development 1749.6 1485.1 1407.7 1648.8 455.4 438.8 482.3 538.6 0 0 0 0 30.6 26.3 18.7 26.7 0 1.9 29.4 16.1 n/a n/a n/a n/a 2,235.6 1,952.1 1,938.1 2,230.2 45.0 97.8 -43.70 74.80 Investments in tangible and intangible assets as well as acquisitions of subsidiaries 158.6 Operational result Return on capital employed (ROCE), % 5.3 325.5 231.2 -60.9 -4.7 -171.1 0.8 -5.2 -0.4 -7.8 -3 EC2 Financial implications and other risks and opportunities for the organisation’s activities due to climate change Climate change is expected to increase Finnair’s operating costs. In combating climate change globally, the main measures are directed at reducing the combustion of fossil fuels. There are various control measures available, ranging from To regulate the carbon dioxide emissions of air transport, the European Union launched a carbon dioxide emissions trading scheme at the beginning of 2012, covering airlines operating in the EU area. Finnair estimates the additional expenses incurred as a result of the emissions trading scheme in its current form and at current prices to be approximately 5 million euros in 2012. However, this cost is expected to increase considerably in the coming years. Climate change also represents a clear risk factor for the travel business. Many holiday destinations are located in areas whose main attractions could be affected by climate change, even to a destructive extent. This could have a significant financial impact on, for example, Oy Aurinkomatkat-Suntours Ltd, which belongs to the Finnair Group. The most effective method of avoiding the negative events caused by climate change, influencing the development and growth of destinations, maintaining their attraction factors and contributing to the sustainable development of tourism is preventative action in partnership with local authorities, policy-makers, financiers, entrepreneurs and other relevant parties, as well as cooperation between tour operators. On the other hand, Finnair’s long-term environmental work and systematic fleet modernisation project may give the company a competitive advantage. Through its modern fleet, Finnair’s fuel consumption per passenger has continually declined and it is competitive compared to the company’s most important competitors. This helps push related unit costs down and will also have a lowering effect on emissions trading costs. Finnair has also carried out successful trials using biofuels on its flights. Climate change is increasing the public’s environmental awareness. When a modern fleet is combined with the ideal location of Finnair’s home airport, Helsinki-Vantaa, between Asia and Europe, Finnair’s efforts to continually reduce its environmental effects might increase the company’s desirability in the eyes of the environmentally-aware flight passenger. Concern for climate change might increase demand for various video and other virtual meetings. The group’s travel agencies already have such services in their product range. In addition, Finnair as an airline and the group’s travel agencies, namely Area, Finland Travel Bureau and Amadeus Finland, offer their customers a carbon footprint report, which takes into account not only flights but also other travel events and overnight hotel stays. EC3 Coverage of the organisation’s defined benefit plan obligations All Finnair Group employees are covered by pension security in accordance with the Employee Pensions Act (TyEL). Pension contributions amount to 19.5 per cent of salaries and 16.1 per cent of total personnel expenses. In addition, some employees are covered by an additional pension fund benefit and management by an additional benefit in accordance with their own contracts. Of group personnel, around 45 per cent are covered by the additional pension fund benefit. Finnair’s pension liability (Finnish Accounting Standards) in respect of its own pension fund is around EUR 324 million. Pension liabilities are covered in full. Contents Introduction Customers Personnel EC4 Significant financial assistance received from government The Finnish Government does not support Finnair’s operations financially. The Finnair Aviation Academy constitutes an exception. The Finnair Aviation Academy, founded in 1964, is a special vocational educational establishment maintained by Finnair Plc, which operates as a special educational establishment under the Act on Vocational Adult Education (631/1998). The Aviation Academy’s task is to arrange further vocational training leading to a vocational or special vocational qualification as well as other further vocational training required for the practice of Finnair Plc’s and its subsidiaries’ operations (Further Vocational Training Arrangement Permit 551/530/2006, 13 December 2006). As a privately-owned educational establishment, the Aviation Academy funds its operations in accordance with government aid practices. In 2011, the Finnair Aviation Academy received a total of approximately EUR 2 million. EC6 Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation Finnair has no local procurement policy as such and does not compile information at a group level on the local characteristics of its suppliers. When purchases are made, attention is paid, for example, to their appropriateness, reliability, price and quality. The products purchased must be long-lasting and as safe as possible for people and the environment. In addition, many of the group’s procurement categories are officially regulated, in which case possible suppliers must be approved by the authorities. For example, all purchases relating to flight safety are of this type. Some group subsidiaries, moreover, have their own principles that support local procurement. Finnair’s largest single procurement item is jet fuel, which is also Finnair’s most significant operational expense item. In jet fuel procurement, financial factors and reliability of supply are most significant. To ensure reliability of supply, Finnair has diversified its jet fuel purchases among some 40 different suppliers. Most of the hotels used in the program of the Finnair Group’s Oy Aurinkomatkat-Suntours Ltd are small and mediumsized hotels, which are, as a rule, locally owned. The assessment criteria for hotels used by Aurinkomatkat gives more weight to hotels which are in local ownership. In addition, a hotel receives additional points if it favours local producers and suppliers in its own procurement. For example, in Aurinkomatkat’s biggest summer destination country, Greece, more than 90 per cent of the hotels used by Aurinkomatkat in summer 2011 were in local ownership. In addition, Aurinkomatkat has a local representative at each of its destinations, from whom the company purchases, among other things, ground transfers, tour arrangements and other operational services. Area Oy and Finland Travel Bureau Ltd, which specialise in business travel, also use local agents when preparing travel programs and making group bookings. Up to 90 per cent of Finnair Catering Oy’s food purchases are from domestic suppliers. Most catering equipment, however, is of foreign origin. Operations Society GRI 50 / 84 EC9 Understanding and describing significant indirect economic impacts, including the extent of impacts As a large employer, Finnair benefits the surrounding community economically, for example via the purchasing power of its own employees as well as the employees of its suppliers and subcontractors. In addition, the significance of air transport for the economic and political life of a geographically distant country such as Finland is considerable. Tourism positively influences the national economies and microeconomies of destination countries, and business travel benefits the economies of its destination countries. On the other hand, travel can also have negative impacts on the economic structure of destination locations. For example, the grey economy, prostitution and the drugs trade may increase in certain circumstances. The Finnair Group’s tour operator Oy Aurinkomatkat-Suntours Ltd, however, actively strives to prevent these problems, for example in its selection of hotels and services and via information conveyed to customers. Key channels for identifying and managing the effects of tourism are memberships in sector organisations as well as commitments to treaties and declarations, such as the Helsinki Declaration. Furthermore, in 2010 Finnair joined the Sustainable Travel Leadership Network, whose purpose is to promote the best practices in the field of sustainable tourism. Oy Aurinkomatkat-Suntours Ltd also has a long history of representation on the board of the Tour Operator’s Initiative (TOI), which promotes sustainable tourism. More information on the economic impacts of aviation and Finnair is provided in the section on economic responsibility. Contents Introduction Customers Personnel Operations Society GRI 51 / 84 Environmental responsibility Finnair’s goal is to be the leading airline in the field of environmental responsibility. We take environmental aspects into consideration in all our operations, and support the International Air Transport Association (IATA) target of zeroemission aviation. We comply with current environmental legislation, but our environmental work aims at exceeding statutory requirements and being a pioneer in evaluating, reporting and reducing environmental impacts. Our environmental work is for the long term. Our environmental organisation has existed in various forms since the late 1980s, and we have reported on our environmental impacts since 1997. The environmental organisation has nowadays been replaced by our corporate responsibility organisation, which in addition to environmental aspects also covers social responsibility. We manage corporate responsibility at the group level, and each unit has individuals responsible for environmental activities and guidelines. Our environmental management steering group cooperates with subcontractors to improve waste management and energy efficiency of Finnair real estate. Finnair participates actively in industry workgroups, such as IATA’s environmental committee and AEA Environmental Committee, as well as in industry workgroups in Finland and the Nordic countries, promoting the reduction of the aviation sector’s environmental load. Finnair’s corporate responsibility policy also defines our strategy for environmental management. The Finnair Board of Directors has a nominated person for corporate responsibility. Environmental training is available for our entire personnel, and we highlight important themes and best practices with different internal and external campaigns. Approximately 95 per cent of an airline’s environmental impact arises from engine emissions. In addition to carbon dioxide emissions and noise, air transport causes other emissions that affect air quality and the climate, and an effort must be made to reduce them. We seek to reduce flight emissions by all possible means. Our actions are focused on four areas: technological advances, operational improvements, infrastructure development and market-related means, such as emissions training. In all these areas we cooperate closely with various players, such as aircraft and engine manufacturers, airports, air traffic control and the relevant authorities. In terms of technology, Finnair’s most important environmental act is modernising its fleet. Finnair already operates one of the youngest fleets in the business. In European traffic we fly with Airbus A320 and Embraer aircraft. Our long haul fleet modernisation was completed in 2010 and the average age of aircraft in the fleet is now 7.2 years. New technology Airbus A350 XWB wide body aircraft will join the fleet in 2015 - 2017. Their average fuel consumption will be less than three litres per hundred kilometres per passenger. Technological development also includes biofuel projects. Finnair flew its first commercial biofuel flights in summer 2011, immediately after the enabling certification came into force. We have several projects on-going in this area and plan to continue biofuel flights. In terms of infrastructure, the Single European Sky project plays a significant role in the development of an efficient air transport system. The Helsinki-Vantaa airport and its three runways ensure smooth operations both on the ground and in the air. In addition we have together with Finnavia explored possibilities to further increase the proportion of Continuous Descent Approach (CDA) landings at Helsinki-Vantaa, which reduce fuel consumption and noise. We continue to carry out projects to reduce fuel consumption, emissions and noise in our operations. In all our operations, we strive to reduce waste and to lower our energy consumption. At Finnair’s operating locations, whether on the ground or in the air, every effort is made to recycle glass, paper and metal and collect energy waste which can be used as an industrial energy source. In addition, Finnair Group collects biowaste. On our flights, we have sorted aluminium, glass, energy waste and plastic wherever possible. The proportion of recycling of waste has risen to more than 60 per cent in Finnair Group. On flights, the share of recycled waste is more than 60 per cent of the waste whose disposal method we can influence. Legislation prevents the reutilisation of international food waste for safety reasons. Finnair Catering has also started to use biodegradable packaging where applicable. Finnair Technical Services and Finnair Catering are the units that consume the most heat, electricity and water. Finnair Catering and its subsidiary FinnCatering have an environmental management system according to the ISO 14001 standard. Finnair Technical Services’ operations are covered by a permit granted by the Uusimaa Regional Environmental Centre, and it reports on its activities annually to the authorities. We pay specific attention to VOC emissions and reducing the use of chemicals in Technical Services. The building of a new headquarters for Finnair has started. The new building will be completed in summer 2012, and environmental aspects are carefully taken into consideration already in the building phase. The builder will seek LEED Gold certification for the building. Our new headquarters will enable new ways of working, which also support environmental sustainability. An open dialogue with different stakeholders is a prerequisite for environmental responsibility. We report on our environmental impacts regularly in this corporate responsibility report and as a part of the Carbon Disclosure Project (CDP). In addition we communicate directly with various parties about its operations and gladly answer questions posed by interest groups. Environmental responsibility calls for the exchange of ideas of and continuous development of our operations according to the latest available information. Contents Introduction Customers Personnel Operations Society 52 / 84 GRI Environmental indicators EN1 Materials used by weight or volume The emphasis of Finnair’s use of materials is mainly on transport fuels, particularly jet fuel. In this report, fuels will be treated mainly as energy and the consumption of fuels is reported in section EN3. Of the group’s other operations, the units that use significant amounts of materials are Finnair Catering Oy, Finnair Technical Services and Finnair Engine Service Oy (together Finnair Technical Services), Finnair Cargo Terminal Operations Oy and Northport Oy. In addition, the Finnair Group’s offices have their own clearly distinguishable profiles as users of materials. As one of Finland’s largest kitchens, Finnair Catering consumes the most materials in the group. The raw materials used in Catering consist mainly of foodstuffs and the materials required for packaging them. Most of the materials used by Catering are renewable. In 2011, Catering managed to cut down its use of materials significantly. The most significant consumption of materials by Finnair’s cargo companies arises from the storage of cargo as well as preparing and protecting cargo for transportation. Boards are needed to distribute the weight of cargo more evenly on pallets. Cargo to be transported is protected with plastic, because the loading and unloading of aircraft and the transport of cargo between the terminal and the aircraft takes place outside, in which case the cargo must be protected from the weather. The most significant material item of Northport, which in 2011 was responsible for Finnair’s ground handling operations, relates to aircraft de-icing. In cold weather, the ice and frost that form on the fuselage and wings of aircraft as well as falling snow must be removed before take-off for flight safety reasons. A mixture of propylene glycol and hot water is used for de-icing. In 2011, Northport’s consumption of propylene glycol fell by nearly 40 per cent compared with the previous year. This was mainly due to weather conditions: the snowfall was particularly heavy in 2010 and both the beginning and the end of the year saw very cold and snowy weather. The snowfall was also very heavy at the beginning of winter 2011 but the temperatures were quite mild during the end of the year. More information on deicing agents is given in section EN21. Finnair Technical Services’ most important environmental aspects relate to the use of chemicals. Due to the use of chemicals, Technical Services must have a valid environmental permit. In 2011 the use of chemicals by Technical Services declined by approximately 3 per cent. The spare parts and components needed for the maintenance of aircraft are to a large extent repairable goods. Technical Services strives to repair aircraft components whenever safety aspects and official regulations allow, because the components are very expensive. This is also common practice within the industry. This means that the lifecycle of aircraft components is typically long. The amounts of components and spare parts are not reported, however, because no universal or meaningful comparable data are available on them. The group’s offices succeeded in reducing their paper consumption by nearly a third. This was mainly due to the introduction of electronic invoicing and booking systems as well as a printing practice that saves paper and training and communication relating to this. Material 1,000 kg 1,000 litres 1,000 metres Biggest user 1,000 units 2011 2010 2009 2011 2010 2009 2011 2010 2009 2011 2010 2009 Plastic 218 240 360 Catering Paper (not office) 260 260 231 Catering Cardboard 100 110 167 Catering Textiles 87 95 119 Catering Metals * 53 70 86 Catering Technical Services Chemicals 222 241 247 Porcelain 18 18 28 Catering Glass 10 10 12 Catering Board 65 Loading pallets (wood) 31 Cargo TO 85 Office paper 33 Propylene glycol ** Food purchases 40 1,442 2,398 1,991 3,023 3,255 2,965 120 49 144 Cargo TO 55 Group’s Finnish offices, total Northport Catering * This figure does not include metals used by Finnair Technical Services, because the statistics system used for metal raw material consumed in Technical Services cannot provide comparable data. Finnair Technical Services does not manufacture products, however, so as a user of raw materials it is not a significant player on an industrial scale and, even within the group, Technical Services’ metal consumption is smaller than that of Catering. ** In the previous report there was a statistical error in the figures for the consumption of propylene glycol. The error has been corrected in this year’s report, which has resulted in lower figures for glycol consumption for previous years. Contents Introduction Customers Personnel Finnair Technical Services’ use of chemicals 2007–2011 2011 2010 Society 53 / 84 GRI The Group’s primary energy consumption 2008–2011 2009 2008 2007 CHEMICAL GROUP 1,000kg Glues and sealing agents Operations Fuel Jet fuel (Jet A-1), 1,000 kg 2.7 3.2 2.6 1.8 2.7 Paints and varnishes 16.5 24.4 17.5 15.5 45.5 Surface finishing agents 11.3 24.5 19.9 16.1 37.8 Cleaning agents and detergents 41.1 48.2 47.4 51.4 65.5 Solvents 29.0 26.4 26.4 29.2 31.9 Lubricants and oils 105.4 86.0 92.7 86.5 92.1 Total 205.9 212.8 205.8 200.5 275.6 N.B.! The figures for the use of chemicals in 2010 are more accurate compared with last year’s report, because recyclable solvents were not included in the 2010 report. EN3 Direct energy consumption by primary energy source Finnair’s direct primary energy consumption consists of the use of transport fuels. Aviation is a very energy-intensive activity. On a global level, Finnair’s largest environmental loadings arise from flying and particularly from the use of fossil jet fuel. In 2011 Finnair’s total consumption of jet fuel increased by nearly 12 per cent compared with the previous year. The increase was due to added capacity in long-haul services. However, Finnair improved its fuel efficiency with respect to available capacity: In 2011 Finnair’s fleet consumed almost 1 per cent less jet fuel per available passenger kilometre and approximately 0.5 per cent less jet fuel per available tonne kilometre. Per revenue passenger kilometre, consumption rose by nearly 3.5 per cent. This is due to the fact that the increase in demand for flights was lower than the increase in capacity. For the same reason, fuel efficiency with respect to payload weight was down by approximately 5 per cent. MWh 2011 2010 2009 2008 800,449 704,885 712,487 831,423 9,629,398 8,479,767 8,571,223 10,002,023 34,665,834 30,527,160 30,856,403 36,007,283 11.9 -1.1 -16.7 2011 2010 2009 27 32 30 41 247 289 268 372 GJ 888 1,041 966 1,339 Change % -17.3 7.2 -38.5 GJ Change % Ground vehicles Petrol, 1,000 l MWh Diesel, 1,000 l 2008 200 220 246 282 MWh 1,996 2,200 2,456 2,821 GJ 7,187 7,922 8,840 10,154 Change -10.2 -11.6 -14.9 1,213 1,675 1,487 1,375 MWh Fuel oil, 1,000 l 12,131 16,747 14,874 13,753 GJ 43,670 60,289 53,546 49,509 -38.1 11.2 7.5 Change % Total 2011 2010 2009 2008 MWh 9,643,772 8,499,003 8,588,821 10,018,968 GJ 34,717,579 30,596,412 30,919,756 36,068,286 Change % , -16.7 -1.1 11.9 In addition to Finnair’s fleet’s energy and fuel consumption, the Group’s energy balance sheet also includes the transportation capacity that Finnair Cargo purchases from other companies. In 2011, transport of the cargo entrusted to Finnair Cargo by other airlines required 25,490 tonnes of jet fuel in total. This is equal to 1,103,920 GJ, and includes cargo flights that were operated solely due to Finnair Cargo requirements. Customers Fuel Consumption And Fuel Efficiency In Flying 2005–2011 Personnel 2011 2010 2009 2008 2007 2006 2005 Consumption, Mkg 800 705 712 831 763 655 617 g/RPK* 36.3 35.1 36 38 38.2 38.3 38.5 g/ASK* 26.8 27 27.3 28.6 29 29.2 28.4 g/RTK 297.1 283 313.5 330 332.5 335.3 342.5 g/ATK 183.7 184.7 183.7 186.9 193.5 195.3 195.7 * Fuel consumption adjusted to passenger traffic. RPK = revenue passenger kilometres ASK = available seat kilometres RTK = revenue tonne kilometre, i.e. capacity use according to payload weight ATK = available tonne kilometre, i.e. capacity according to payload weight RPK and ASK describe passenger traffic performance and RTK and ATK describe performance according to payload capacity (passengers + baggage + cargo). Jet fuel consumption 2005–2011 tonnes 1,000,000 800,449 750,000 500,000 Operations Society Passenger traffic fuel efficiency 2005–2011 grams g/RPK g/ASK UUSI Introduction UUSI Contents Payload fuel efficiency 2005–2011 grams g/RTK g/ATK 40 400 30 300 20 200 10 100 0 0 05 06 07 08 09 10 11 54 / 84 GRI 05 06 07 08 09 10 11 Adjusted to passenger traffic. EN4 Indirect energy consumption by primary source In 2011 Finnair’s indirect energy consumption fell by nearly 10 per cent from the previous year. The most significant savings – over 15 per cent – were made with respect to heating energy. In another positive achievement, electricity consumption also declined further in 2011. The mild weather conditions in late 2011 were the most important factor in reducing the need for heat energy, but Finnair has also worked towards its long-term goal of reducing energy consumption. Energy consumption of the Finnair Group’s properties in 2007–2011. The figures do not include the consumption of the Pirkkala properties. Indirect energy consumption 250,000 0 05 06 07 08 09 10 11 Electricity 2011 2010 2009 2008 2007 MWh 54,721 56,034 56,693 58,135 59,728 GJ 196,996 201,722 204,090 209,286 215,021 -2.3 -1.2 -2.5 -3 Change % Heat MWh 59,551 70,375 60,866 63,262 57,135 GJ 214,384 253,350 219,120 227,743 205,686 -15.4 15.6 -3.8 11 MWh 114,272 126,409 117,559 121,397 116,863 GJ 411,379 455,072 423,210 437,029 420,707 -9.6 7.5 -3.2 3.9 Change % Total Change % Contents Introduction Customers Personnel Of the heat energy consumed by Finnair, 195,174 GJ, i.e. more than 90 per cent, was consumed in the group’s operating locations situated at Helsinki-Vantaa Airport. Some 62,316 MWh, corresponding to 224,338 GJ, of primary energy was needed to produce this heat. The heat energy was delivered via the district heating system, which was produced by natural gas (60 per cent), coal (39 per cent) and oil (1 per cent). Finnair buys electricity from the electricity derivatives market via the national grid. According to the company that maintains the grid, most of the production is carbon neutral, but part is produced by fossil fuels. The different energy sources and their relative proportions are not known, nor is the amount of primary energy required to produce the electricity. Finnair is discussing the possibility of acquiring green electricity. EN5 Energy saved due to conservation and efficiency improvements Owing to the energy-intensive nature of its operations, Finnair has a strong interest in making its operations more energy efficient. The single most significant measure by which Finnair has reduced its energy consumption is its fleet modernisation, which began in the late 1990s. The first stage of fleet modernisation was completed in 2010. The new generation of aircraft consumes significantly less fuel: mainly due to fleet modernisation, fuel consumption per seat declined by 22 per cent between 1999 and 2009. The carbon dioxide emissions from flying have also declined by a corresponding amount. Operations Society GRI 55 / 84 offers the same elements in annual training sessions. Multifly™, organised in collaboration with Patria Pilot Training, provides newly qualified pilots with extensive skills in economical flying, also in the challenging Northern conditions. Finnair Flight Academy also markets its training solutions to other airlines. These measures are expected to bring about up to 2 per cent savings in fuel consumption and operative costs in Finnair. In March, Finnair participated in the international Earth Hour event by switching off its advertising lights at the airport and in various properties for a whole weekend. In October, Finnair held its annual energy-saving week, during which information and tips on various ways to save energy, both in the workplace and at home, were disseminated through internal communications channels. Every day of the week had its own theme, and in relation to each theme personnel were encouraged to discuss and consider the significance of energy saving as well as new ways to save energy. Finnair Facilities Management Oy has also joined an energy efficiency agreement between the Confederation of Finnish Industries, the Ministry of Employment and the Economy and sector organisations. The parties to the agreement are committed to reducing properties’ energy consumption by nine per cent from the 2007 level by 2016. Energy saving on Finnair Group properties 2011 As a partner of Finavia, Finnair has already participated for many years in the development of new kinds of landing practice. In Continuous Descent Approach (CDA) landing, the aircraft’s altitude is reduced gradually throughout the entire landing stage. A landing performed in the traditional way includes horizontal flight stages, in which the aircraft’s engines have to be used now and then with greater power. This means that the aircraft’s consumption of fuel and air emissions are higher than in a CDA landing. In 2011, some 46 per cent of all Finnair landings at Helsinki-Vantaa were CDA landings. This is three percentage points less than in 2010. The decline in the proportion of CDA landings was due to congested airspace at certain times of the day when Finnair’s operations take place. At other domestic airports, the proportion of CDA landings is significantly higher, but numerical data are not available. In 2011 Finnair launched a program which aims at approximately 2 per cent savings annually in jet fuel consumption. This equates to saving approximately 14 million kilograms of jet fuel annually. With respect to fuel-related economy projects, in 2011 Finnair completed its program aiming to reduce the use of APU (auxiliary power unit). A reduction of slightly over 20 per cent in using APU in the Airbus 320 fleet brought about savings of 1.1 million kilograms of fuel, which is nearly 48,000 GJ and thus reduces emissions by 3,5 million kg of CO2. APU is an auxiliary power unit in aircraft which provides electricity, compressed air and hydraulic power for the aircraft’s systems. For the year 2011, other energy-saving measures in flight operations are yet to be determined. Projects which have already been started aim to save fuel by reducing aircraft empty weight, optimising flight methods and speed as well as improving taxi, take-off and approach procedures. All these initiatives are expected to bring about savings already during 2012. Another way of improving aircraft fuel economy is training the pilots. Finnair Flight Academy’s new training solutions emphasise the benefits of economical flying. Their aim is to reduce operative costs, improve training models and reduce emissions. International Air Transport Association (IATA) has estimated that inefficient operational models increase operational costs by as much as 2–8 per cent. The Reverse Green™ training program covers all areas of flying that have an effect on overall economy in relation to skills and attitude. The Fit to Fly™ recurrent training program Heat All properties, reducing temperature of properties by 1°C All properties, changes to AC equipment configuration 1,800 GJ 666 GJ Electricity Total All properties, raising internal temperature of properties by 1°C in summer 540 GJ All properties, changes to AC equipment configuration 356 GJ 3,362 GJ EN6 Initiatives to provide energy-efficient or renewable energy-based products and services, and reductions in energy requirements as a result of these initiatives Finnair requires the biofuel it uses to be produced in a genuinely sustainable way. This means, among other things, that the production of biofuels is not based on the production of food crops and that land use in the production of raw materials is sustainable socially, economically and environmentally. Finnair first used biofuel in its aircraft in July 2011, after the certification became effective. More on this topic on pages 31–32. The group’s travel agencies offer their customers opportunities to reduce their business travel by utilising the virtual meeting services they provide. Contents Introduction Customers Personnel Operations Society GRI 56 / 84 they survive. The organisation’s base, the Marine Biological Centre, is located at Cape Panwa, Phuket. The research centre has, among other things, a turtle rehabilitation centre, where visitors are told about endangered animals and the dangers of discarded rubbish to marine animals. The centre also shows, for example, how nets and floating plastic pose a danger to turtles. Visitors are also informed of adjustment projects. EN8 Total water withdrawal by source In 2011 water consumption in Finnair fell by slightly over 4 per cent from the previous year. Water Consumption In The Finnair Group 2007–2011 Water consumption 2011 2010 2009 2008 2007 Water, 1,000m3 116.3 121.5 109.3 112.4 128.4 -4.3 11.2 -2.8 -12.5 Change % In 2011 the water used by Finnair was taken from the municipal water supply network. The water source is Lake Päijänne. EN11 Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas The Finnair Group has no owned, leased or managed land areas in protected areas or directly adjacent to them. Of the group’s business units and subsidiaries, Finnair Technical Services is the only division that handles significant quantities of materials hazardous to the environment. Finnair Technical Services is situated in a zoned area at HelsinkiVantaa Airport. The zoned area is close to a ground water area. Technical Services has a valid environmental permit, the conditions of which oblige the company to review the effects of its activities on the environment and to report on them regularly to the authorities. EN13 Habitats protected or restored Finnair participates in a project in Madagascar launched by the Finnish Association for Nature Conservation. For more information, see pages 40–41. In addition, Finnair is a member of the River Vantaa and Helsinki Region Waterways Protection Association, which aims to promote the protection of waterways in Finnair’s operating area. The association also seeks to promote other environmental protection, recreational use of waterways and fishing in its area. EN14 Strategies, current actions, and future plans for managing impacts on biodiversity International cargo operations by both air and sea adhere to the International Standards for Phytosanitary Measures prescribed by the Food and Agriculture Organisation (FAO), which regulate, among other things, the quality and characteristics of timber used in logistics. Timber must be treated so that no parasites or insect pests are transported along with it. Correctly-treated timber is also stamped in the manner required by these standards. The Finnair Group’s tour operator Aurinkomatkat-Suntours Ltd has since 2008 been a main sponsor of the Finnish environmental organisation Turtle Watch, which operates in Phuket, Thailand. The organisation’s Finnish marine biologists are studying how green turtles raised in captivity can be introduced back into nature. The purpose is to determine how transplantation works as a means of protection for the endangered green turtle. The turtles studied are fitted with satellite locators, which help researchers to track the turtles’ movements in the sea and ascertain how well Aurinkomatkat-Suntours also participates in a Turtle Watch campaign aimed at reducing the exploitation of wild animals as tourist attractions. Endangered wild animals, such as monkeys, elephants and exotic lizards are familiar sights on the busy tourist streets of Thailand where they are used as photo props and restaurant entertainment. Many of these “street animals” are internationally classified as endangered and all of them are victims of illegal wildlife trade. In addition, the legislation of Thailand does not allow gibbons and elephants in the street. Aurinkomatkat-Suntours is also involved in a turtle protection project on the island of Zakinthos in Greece. The island is one of the most important nesting areas for loggerhead turtles in the Mediterranean, as one quarter of all of these turtles’ nests are located on Zakinthos. The project’s focus is on the protection of loggerhead turtles nesting on the island as well as the construction of a turtle rescue centre close to the port of Agios Sostis. EN15 Endangered species with habitats in areas affected by the organisation’s operations The location of Helsinki-Vantaa Airport is such that runoff water from the airport can reach the River Vantaa, where there is a significant population of the thick-shelled river mussel (Unio crassus). The protected bivalve is classified as a near threatened (NT) species and it has also been protected under the EU Habitats Directive. Both Finnair Technical Services and Finavia, which maintains Helsinki-Vantaa Airport, have on the basis of their environmental permits, a continuous obligation to monitor the effects of their operations. According to a study conducted by a third party and completed in December 2012, the impact of the airport was not distinguishable during the monitoring period in analyses made at the River Vantaa and the River Kerava. EN16 Total direct and indirect greenhouse gas emissions Nearly all of Finnair Group’s greenhouse gas emissions arise from flying. Flying primarily causes two kinds of direct greenhouse gas emissions: carbon dioxide and water vapour. Water vapour is the most important greenhouse gas in the atmosphere, but it is not generally examined directly as a human-derived greenhouse gas emission, because the water vapour in the atmosphere is mainly the result of natural evaporation. Air transport can in this respect be considered to be in a special position, because the water vapour generated as engine emissions is released high in the atmosphere, increasing the atmosphere’s H2O content above the cloud layer. Not much is yet known, however, about the significance of air transport’s water vapour emissions, and the uncertainties are great. In 2010, Finnair Group set an ambitious target for cutting its carbon dioxide emissions. In its target, Finnair undertakes to reduce its CO2 emissions by 24 per cent per seat from the 2009 level by 2017. Contents Introduction Customers Personnel Operations Society 57 / 84 GRI The Finnair Group’s direct and indirect greenhouse gas emissions CO2, 1,000 kg Direct greenhouse gas emissions Flying AY H2O, 1,000 kg 2011 2010 2009 2008 2011 2010 2009 2008 2,521,414 2,220,388 2,244,335 2,618,984 1,040,583 916,351 926,234 1,080,850 3,870 5,181 4,738 4,559 1,040,583 916,351 926,234 1,080,850 Ground equipment AY Indirect greenhouse gas emissions Electricity 10,070 1,884 0 0 Heat 14,850 20,684 15,328 17700 2,550,203 2,248,137 2,264,401 2,641,243 Total These figures also include the capacity acquired from other operators by Finnair Cargo. In 2011 this capacity for cargo produced 80,293 tn CO2. Direct CO2 emissions 2008–2011 tonnes 3E+09 2,521,414 2,5E+09 Passenger traffic unit-specific CO2 emissions 2005–2011 grams g/RPK g/ASK 1,200 120 1,000 800 80 1,5E+09 600 60 1E+09 400 40 500,000 20 0 0 05 06 07 08 09 10 11 Payload traffic unit-specific CO2 emissions 2005–2011 grams g/RTK g/ATK 140 100 2E+09 UUSI UUSI UUSI Information on truck transport used by Finnair Cargo is absent from this report. Finnair Cargo purchases a large quantity of transport services from truck companies, and the statistical practices of these companies do not allow actual emissions to be calculated, at least not yet. Finnair Cargo’s main partners in truck traffic use vehicles classified as EURO 3 at the least, but the majority already use vehicles classified as EURO 4 or EURO 5. 200 05 06 07 08 09 10 11 0 05 06 07 08 09 10 11 Adjusted to passenger traffic. RPK = revenue passenger kilometres. ASK = available seat kilometres. RTK = revenue tonne kilometres, i.e. use of capacity by useful load weight. ATK = available tonne kilometres, i.e. capacity by useful load weight. RPK and ASK show passenger traffic deliverables and RTK and ATK show total capacity (passengers + luggage + cargo) deliverables. Contents Introduction Customers Personnel EN19 Emissions of ozone-depleting substances The Finnair Group does not use agents that destroy the ozone layer in the upper atmosphere. Aircraft fire extinguishing systems, which use halon fire-extinguishing agents, represent an exception to this. Finnair has to use halons in its aircraft fire-extinguishing systems, because replacement agents approved for civil aviation use are not yet on the market. The types of halon used in Finnair aircraft are halon 1301 and halon 1211. In 2011, three extinguishers containing halon 1301 gas were set off, resulting in 8.305 grams of halon being released into the atmosphere. Two of the extinguishers were set off as a result of a false fire indication and one extinguisher was set off accidentally. Operations Society Unit-specific NOx emissions, passenger traffic 2005–2011 grams g/RPK g/ASK Unit-specific NOx emissions, relative to payload capacity 2005–2011 grams g/RTK g/ATK 0.60 5.00 0.50 4.00 0.40 3.00 0.30 2.00 0.20 Halons released into the atmosphere 2011 2010 2009 Halon 1211 0.3 0 0 Halon 1301 8.3 3.6 0 Total 8.6 3.6 0 0 36,0 83,8 kg The ODP (ozone depleting potential) of halon 1211 is 3 and that of halon 1301 is 10. The ODP of a chemical compound is the relative amount of degradation to the ozone layer it can cause. The reference level of one is the potential of CFC11 and CFC-12 to cause ozone depletion. EN20 Nitrogen and sulphur oxides (NOx, SOx), and other significant air emissions In 2011, the total nitrogen oxide emissions from Finnair flight operations increased by 1.5 per cent from the previous year. This is explained by increased capacity, especially in long-distance traffic. Besides carbon dioxide, nitrogen oxides (NOx) are the most significant air emission arising from flying. NOx emissions arise in combustion processes that take place at high temperatures. Nitrogen oxides contribute to the formation of ozone in the lower atmosphere, but destroy methane, which is a powerful greenhouse gas, in the atmosphere. The impact of nitrogen oxides is complex and in many respects still not fully understood. The basis of the calculation of NOx emissions produced by the engines of Finnair aircraft are emission figures in relation to route lengths reported by engine and aircraft manufacturers. In Finnair, these values are applied to actual fuel consumptions separately for each individual route. In addition, figures are compared with documents based on engine certifications maintained by the UN’s International Civil Aviation Organisation (ICAO). 0.00 05 06 07 08 09 10 11 05 06 07 08 09 10 11 Adjusted to passenger traffic. Alongside NO emissions, the group’s operations give rise to volatile organic compound (VOC) emissions. VOC emissions are harmful to the environment, for example, by contributing to the formation of ozone in the lower atmosphere. Lower-atmosphere ozone, moreover, is harmful to both human health and flora. The group’s VOC emissions are derived mainly from hydrocarbons that remain uncombusted during the combustion of transport fuels as well as from chemicals used in Technical Services. Finnair Technical Services’ environmental permit specifies an upper annual limit for VOC emissions and Technical Services’ emissions are considerably lower than this. In 2011, Finnair Technical Services’ VOC emissions were reduced by 3 per cent from the previous year. Finnair Technical Services VOC emissions in 2011 Aliphatic hydrocarbons Aromatic hydrocarbons Ketones 2011 2010 2009 2008 2007 2006 2005 6.0 5.9 7.1 9.7 9.1 8.6 8.1 Halogenated hydroAlcohols carbons Various others Total 6.6 6.6 0.2 0.2 3.5 6.5 0.2 0.2 1,000 kg Paints and varnishes Paint removal agents 2.5 0.1 Glues and sealing agents Solvents 1.4 0.1 0.5 1.1 Anti-corrosion agents Cleaning agents NOx emissions arising from Finnair flight operations 2005-2011 NOx emissions, Mkg 1.00 0.10 0.00 CFC equivalence total 58 / 84 GRI 2.6 4.4 Washing benzene / washing solvents 3.4 Total 4.8 4.4 3.4 0.1 0.5 8.0 0.1 10.4 23.9 Contents Introduction Customers Personnel Operations Society Amounts of waste according to final disposal method (figures do not include hazardous waste) Development of use of solvent-containing chemicals and VOC emissions in Finnair Technical Services, 1992–2011 kg VOC emissions Solvent-containing chemicals 2011 2009 2008 357 Composting 461 469 359 Change, % -1.7 30.6 0.6 Recycling 150,000 100,000 50,000 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 1,374 1,251 1,164.5 Change, % 9.8 7.5 -6.5 Energy use 1,349 756 498 Change, % 78.5 51.7 -2.7 Landfill site* 1,671 2,180 2,828 Change, % -23.4 -22.9 -17.5 An operational disruption occurred at Finnair Technical Services’ wastewater treatment plant in June, when an ultrafilter membrane was broken. The disruption was detected immediately and the wastewater line was closed. After the incident, wastewater generated by the Technical Services’ processes and containing heavy metals was directed into a buffer tank from where it was taken to a hazardous waste disposal service untreated. The incident did not damage the operations of the municipal wastewater treatment plant or waterways. 163 194 -3.5 -16.1 14.8 5,011 4,819 5,044 4.0 -4.5 -11.7 Re-utilisation % 66.7 54.8 43.9 40.0 Recycling-% 39.7 39.1 34.1 31.0 169 5,710 * In 2011, of the amount of waste that ended up in landfill sites, 62 per cent consisted of food portions and trays served on flights and produced outside the EU area, which according to EU regulations must be destroyed by a special method. ** Other waste means re-utilised waste that goes to a third party for further processing. The proportions of each waste segment are not known. Other waste is considered recyclable waste here. Amounts of waste 2008–2011 tonnes Amounts of waste and utilisation percentage 2008–2011 Total, tonnes Utilisation, % 6,000 5,800 5,000 EN22 Total weight of waste by type and disposal method The total amount of waste generated by Finnair increased by 4 per cent from the previous year. According to EU regulations, all animal waste from outside the EU area as well as all material that has been in contact with it must be disposed of by a special method. 3,427 157 UUSI UUSI With respect to propylene glycol, according to research into its effects during winter 2010-2011, the airport’s operations were not perceptible in analysis results from the River Vantaa and the River Kerava. Finavia, which maintains Helsinki-Vantaa Airport, issues reports on the propylene glycol and the amounts thereof that end up in the soil and waterways in connection with aircraft de-icing. 512 Other** Change, % EN21 Total water discharge Wastewaters produced by the Finnair Group are discharged into the municipal sewerage network. The exception is a water-propylene glycol mixture used in aircraft de-icing, which in small amounts ends up in small streams and ditches that surround Helsinki-Vantaa Airport. The area’s streams and ditches run into the River Vantaa and the River Kerava. 1,245 Change, % Total More focus was placed on waste sorting and the waste recovery rate was again significantly improved in 2011. 2010 1,000 kg 200,000 0 59 / 84 GRI 5,400 4,000 3,000 4,600 1,000 08 Composting Recycling Energy use 09 10 Landfill site* Other** 11 4,200 80 60 5011.2 5,000 2,000 0 66.7 40 20 08 09 10 11 0 Contents Introduction Customers Personnel Operations Society 60 / 84 GRI Most of Finnair’s hazardous waste is generated by Technical Services. The increase is explained by two factors. During the summer, an ultrafilter membrane broke at Finnair Technical Services’ wastewater treatment plant. The disruption was detected immediately and the wastewater line was closed. After the incident, wastewater generated by Technical Services’ processes and containing heavy metals was directed into a buffer tank from where it was taken to a hazardous waste disposal service untreated. The incident did not damage the operations of the municipal wastewater treatment plant or waterways. EN23 Total number and volume of significant spills In 2011 no major oil or chemical leaks occurred in Finnair Group. The other explanatory factor is that Finnair Engine Services’ Surface Treatment department performed a maintenance change of surface treatment baths. The old baths were delivered to a hazardous waste disposal service untreated. In summer 2011, Finnair Technical Services carried out an analysis of the soil condition of its glycol refilling station to identify possible leaks. No traces of glycol or its decay products were found in the soil samples taken from under the refilling station protective tanks. A few smaller leaks occurred. The leaks occurred onto asphalt and all of the leaked hydraulic fluid was recovered. The total volume of leaked hydraulic fluid was an estimated 400 litres. Hazardous waste generated 2011 2010 2009 2008 202.4 1,000kg 175.2 117.2 138.3 Change, % Hazardous waste 49.5 -15.3 -31.7 Re-utilised * 41.9 34.8 30.7 54.5 * The re-utilised hazardous waste consists of waste kerosene, which is used as an auxiliary fuel in hazardous waste processing, and also some solvent waste, which is cleaned by a partner and returned to Technical Services for re-use. EN26 Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation One typical adverse environmental effect of air transport is noise. The noise produced by aircraft is mainly engine noise and aerodynamic noise. The level of engine noise is greater in takeoffs, while the level of aerodynamic noise grows during approaches. In the Finnair Group, noise pollution is reduced by modernising the aircraft fleet and by planning takeoffs and landings at less undesirable times from a noise perspective. Finnair fleet noise values Aircraft type Engine type Takeoff noise / ICAO noise limit Approach noise / ICAO noise limit MD-11 GE CF6-80C2D1F 94.7/102.3 104.1/105.0 B757-200 P&W 2040 87.3/97.3 98.1/101.8 A340-311 CFM56-5C2 95.0/103.7 97.2/104.7 A330-302 GE-CF6-80E1A4/B 92.2/98.1 98.6/104.4 250 B757-200 P&W 2040 89.7/94.1 98.1/102.0 200 A319-112 CFM56-5B6/2P 83.4/90.9 94.7/100.2 A320-214 CFM56-5B4/2P 83.6/91.3 96.0/100.4 A320-214 CFM56-5B6/2P 84.9/91.6 96.0/100.6 A321-211 CFM56-5B3/2P 86.4/92.2 97.0/100.9 A321-211 CFM56-5B3/2P 88.3/92.6 97.0/101.1 Embraer 190 GE CF34-10E 86.1/89.3 92.7/99.2 Embraer 170 GE CF34-8ES 84.1/89.0 94.9/98.2 Finnair Technical Services’ hazardous waste 2008–2011 tonnes 175.2 150 100 50 0 08 09 10 11 Contents Introduction Customers Personnel Operations Society GRI 61 / 84 Social responsibility Responsibility for personnel Management Finnair entered a new phase of developing its management culture in 2011. The previously-identified management principles (goal-oriented, developing, incentivising, caring and fair) were used to create a 360-degree evaluation and development programs for strategic management (Horizon) and middle management (Takeoff). The primary goal of the coaching programs was to create a common foundation for management at Finnair and to provide managers with tools for leading their teams, their businesses and each other through a period of change. The same concept will also be applied in the implementation of a training program for team supervisors. This helps Finnair Group to develop a consistent management culture and create a stronger network of supervisors. Finnair also honed its talent review and successor planning processes in 2011. The talent review is largely based on Finnair’s management principles and the Performance Dialogue (PD) process. The talent review has successfully improved successor planning and career rotation opportunities. Performance evaluation: a key tool for management Finnair implemented a new PD process for setting goals and evaluating performance throughout the group in 2011. The PD process is Finnair’s most important management tool and each supervisor is responsible for its implementation. Finnair supported all supervisors in the implementation of the PD process by providing relevant training. The PD process provides a framework for the systematic planning, monitoring and evaluation of goals. The process also involves an evaluation of management and performance. Along with goal setting and evaluation, development discussions are also an equally important part of the process. Development discussions are used to review each employee’s development needs and they also provide an opportunity for both parties involved to give feedback. The general objective of the PD process is to strengthen the organisation’s performance-based culture and build mutual trust between supervisors and employees. 4D wellbeing in work survey revised in 2011 Finnair revised the contents of its 4D wellbeing-in-work survey in 2011. The purpose of the revision was to update and improve the scope of the wellbeing metrics and the personnel survey. The goals of the revision were: • The accuracy of the metrics used: The survey must measure things that are meaningful to Finnair by asking the right questions. • The simplicity of the metrics used: Instead of reporting the responses to each question, the report on the survey results covers high-level metrics that help to focus development efforts appropriately. • Reflecting Finnair’s strategic focal points in the contents of the metrics used, such as customer orientation and building an international winning team • Clarifying metrics related to the following HR focal areas at the individual and work community levels: performance management, management development and improving trust • Better incorporating measurement of employee commitment, both emotionally and behaviourally, in the metrics. Employee commitment to Finnair, its strategy, ways of working and organisational renewal are key preconditions for the group’s success and therefore the level and development of commitment needs to be monitored. Finnair measures daily wellbeing at work, job satisfaction and general satisfaction through the implementation of a revised 4D Pulse survey, which also relates directly to Finnair’s Peace of Mind customer service philosophy. The aver- age scores on the 4D Pulse survey can be seen as a general index of occupational wellbeing and job satisfaction in the working community. With a response rate of 67.7 per cent, participation in the survey was dramatically higher in 2011 than in previous years. Trust forum Cooperation between labour organisations and the employer’s representatives was strengthened in 2011. Regular monthly trust forums, which began in autumn 2011, provide opportunities for joint development and open dialogue for representatives of labour organisations and the employer. The forums cover current themes and also focus on the planning of improved operating methods and practices. Occupational safety Finnair has performed an occupational safety evaluation of all tasks and this forms the basis for developing working conditions, practices and tools. Safety evaluation efforts in 2011 focused on updating the evaluations and documenting them in a shared management system that can be viewed by everyone on the company intranet. Developing the reporting of accidents and hazardous situations has been an important focal point for Finnair Group for several years. The aim of reporting is to activate personnel to participate in detecting safety deficiencies and maintaining safety on a daily basis. Occupational safety activity at the group level is goal-oriented and systematic. Maintaining and developing occupational safety happens on a daily basis and responsibility for it lies with the line organisation. It is the responsibility of supervisors to manage safety, and they also have a key role in creating and maintaining a safety culture on a daily basis. In practice, this involves the continual observation of working conditions, safe working practices and the safety of working tools as well as addressing and resolving shortcomings where necessary. Safety walks by management and supervisors and related safety discussions are among the tools implemented by supervisors in the daily management of safety and also used in many of Finnair’s production environments. Workplace occupational health and safety organisations support and assist line organisations in promoting safety. Occupational health and safety organisations carry out supervision, guidance, development and monitoring activity to improve the working environment in cooperation with the line organisation. Legal responsibility for occupational safety and working conditions rests with the line organisation. At the Finnair level, occupational safety issues are the responsibility of the group’s occupational safety organisation, which is also responsible for developing and coordinating the occupational safety activity of the entire company. Finnair provides safety training and information to its personnel to the extent required by their work duties. Awareness is increased via the intranet, the personnel magazine and other communication channels. A particular development in 2011 was the presence of turbulence, a serious accident hazard in the aviation industry, as a factor in several accidents involving cabin crew. The difficulty of detecting clear air turbulence makes the prevention of related hazards exceptionally challenging. Accidents involving turbulence also tend to be relatively serious, as turbulence can cause a sudden vibration or loss of altitude, which can lead to collisions, falls and sprains when crew are moving along aisles in the cabin. Contents Introduction Customers Personnel Occupational health and wellbeing In the aviation industry, some employees have to work in exceptional conditions and at atypical working hours. At Finnair, the Finnair Health Services unit is responsible for activities relating to occupational health and working capacity. Finnair Health Services is one of Finland’s leading experts in aviation medicine. Finnair Health Services has focused in particular on developing screening and care practices for illnesses that threaten working capacity. At Finnair, workplaces and occupational health care have cooperated in many ways to improve operating practices that enable employees to continue in their present work despite individual health restrictions and ageing. These measures are implemented with, among other things, the aid of training, trial work placements, lightening of workloads, job modifications and flexible working times. Occupational health issues are communicated actively by Finnair utilising the group’s internal communication channels and by arranging special occupational health theme days. Equality No-one at Finnair is discriminated against on the basis of gender, age, ethnic or national origin, nationality, language, religious or political belief, opinion, health, disability, sexual orientation or other personal reason or circumstance. Other personal reason or circumstance may refer to, for instance, wealth, family or domicile. Finnair does not condone disturbances or harassment in the work community. Reporting infractions is every employee’s right and obligation and Finnair is determined to intervene in all cases. Finnair offers equal opportunities to everyone with regard to recruitment, work performance, career progression and development. Finnair implements the equal pay principle based on the Finnish Equality Act. An employee’s gender does not influence pay. Finnair gives both men and women equal opportunities for balancing work and family life. Business unit and subsidiary HR units are responsible for implementing, developing and monitoring equality at the upper levels of operations. In daily operations, responsibility for implementing equality issues rests with the line organisation. Finnair’s HR unit directs and monitors the handling of personnel matters at the group level and works in close cooperation with those responsible for personnel matters in the business units and subsidiaries. Finnair’s HR unit is also responsible for developing human resources at the group level. The legality of operations is also monitored as part of the group’s general control and audit processes. Operations Society GRI 62 / 84 Contents Introduction Customers Personnel Operations Society GRI 63 / 84 Responsibility for human rights Procurement practices Finnair’s procurement guidelines set clear principles to ensure ethical purchasing. Finnair also expects its suppliers to act according to the company’s ethical operating practices. Finnair’s procurement operations are entirely based on the objective and fair treatment of suppliers. The persons who make procurement decisions at Finnair must always be fully independent of the business partners concerned. A Finnair employee must declare himself/herself disqualified due to bias whenever they are required to make a decision pertaining to a contract or business relationship involving family relationships, ownership in the company concerned (with the exception of a reasonable share of ownership in a listed company) or any other business or debt relationship external to Finnair. A procurement steering group operating under Finnair’s management is responsible for the steering, development and coordination of the group’s procurement activity. The most significant product/service entities are the responsibility of cross-organisational or intra-business unit procurement groups, i.e. category teams, formed around each product or service entity. The management of each business unit must ensure that individuals handling procurement activity have at their disposal up-to-date procurement guidelines and that the guidelines are adhered to. All of Finnair’s procurement activity adheres to Finnair’s Code of Conduct and Finnair’s Procurement Guidelines document, which specifies the general policies governing all procurement. In addition, subsidiaries and business units have their own, more detailed, procurement guidelines, which specify more detailed criteria under the general procurement guidelines, taking into account the special needs of each operating unit. Conforming with the UN’s Universal Declaration of Human Rights and all applicable laws and statutes is an absolute minimum requirement. It is the responsibility of everyone involved in procurement to play their part in ensuring that the procurement guidelines are adhered to. A more general monitoring responsibility rests with those responsible in the product and service groups. Auditing is performed in certain product and service groups. Auditing focuses on quality and safety factors. With respect to procurement covered by official regulations, only operators approved by the International Air Transport Association (IATA) can act as suppliers or subcontractors to Finnair. In human rights matters, Finnair obliges its suppliers and subcontractors to adhere to, among other things, Finnair’s Ethical Operating Practices for Suppliers. (Annex 7.5) Discrimination Finnair does not accept discrimination in any form. Finnair’s anti-discrimination policy is based on the company’s Human Resources Handbook and Code of Conduct. At Finnair, no one is discriminated against for reasons of gender, religious or political conviction, age, race, skin colour or origin. Harassment and disruption of any kind in the workplace has no place in the company’s operating culture. It is the duty of every group employee to act so that no one is accorded an unequal status. Business unit managers are responsible for ensuring that any equality issues arising in their units are addressed and resolved. The group conducts equality planning and develops anti-discrimination practices continually as part of normal human resources management. The legality and regulatory compliance of operations is also monitored as part of the group’s general monitoring and audit processes. Freedom of association and collective negotiation The Finnair Group understands and accepts the right of workers to organise. There is a long tradition of trade union activity in the company. In addition, freedom of association and the collective right to negotiate on occupational issues are recognised as fundamental rights in Finland. Labour market culture in the company has been constructed in such a way that the organisation of workers and collective negotiations between the company and employee groups are part of normal activity. Child and forced labour The Finnair Group does not accept the use of child or forced labour at any stage of the company’s value chain. In all of its activities, the group complies with legislation and also requires this of its partners. In addition, the group requires its personnel and partners to adhere to the principles of the UN’s Universal Declaration of Human Rights in all grouprelated activities. As an airline, Finnair operates under strict international regulation and supervision. The company considers that there is no significant risk of child or forced labour in flight operations. With respect to procurement practices, the same rules and principles apply to child and forced labour as apply to other human rights issues. The legality of Finnair’s operations is monitored as part of the group’s general control and audit processes. Our ethical operating practices for suppliers Finnair expects its suppliers to act according to the group’s ethical operating practices. These guidelines do not contain instructions for all possible situations; the intention is to give a general indication of how to behave. Complying with laws and regulations Suppliers and their representatives must conduct their business in accordance with local laws and regulations. In all their activities, suppliers must comply with environmental law. Business practices Suppliers’ business transactions must be carried out honestly and in accordance with agreed terms and conditions of agreement. In addition to other terms and conditions of agreement, all suppliers must comply with the following guidelines: • Suppliers must act in accordance with the UN’s Universal Declaration of Human Rights • Information relating to business operations is created and stored, and archived information destroyed, in accordance with local laws and regulations • Suppliers must use the material and immaterial property of Finnair responsibly (premises, supplies, consumables and equipment which the Finnair Group has authorised the supplier to use) • Suppliers must comply with all of Finnair’s requirements relating to passwords, confidentiality and data security • Suppliers must keep secure the confidential and secret information they receive, and ensure that the information does not fall into unauthorised hands nor is otherwise misused • Suppliers must respect the ownership of Finnair’s intellectual property rights, including copyrights, trademark rights and business secrets Contents Introduction Customers Personnel • Suppliers must refrain from issuing statements to representatives of the media on Finnair’s behalf • Suppliers must exercise good discretion and moderation when giving gifts or entertainment benefits to Finnair employees. Finnair does not accept corruption in any form. Particularly during competitive tendering, suppliers must refrain completely from offering benefits to group employees. • Suppliers must not engage in business activities with Finnair employees whose life partner or other family member or relative is in a position in which he or she benefits financially from the supplier Practices relating to personnel In managing their personnel, Finnair suppliers must comply with all local laws and regulations. When operating at a shared workplace, a supplier’s employees are required to comply with the same safe working methods and operating principles as Finnair employees, including those pertaining to protective equipment, permits and adherence to operating guidelines while taking local circumstances into consideration. Finnair also negotiates cooperation and communication practices with suppliers with regard to occupational safety and health. It is the supplier’s responsibility to ensure that its representatives undertake to comply with the ethical guidelines intended for Finnair Group suppliers. Operations Society GRI 64 / 84 Contents Introduction Customers Personnel Operations Society GRI 65 / 84 Social responsibility Social influence Aviation is a strictly regulated sector. As such, it is important for Finnair to participate in discussions and decisionmaking concerning its operating conditions. Monitoring relating to the prevention of corruption is the responsibility of management and Internal Auditing. Internal Auditing monitors compliance with the key principles of the Code of Conduct as part of analysing and controlling business processes and through special inspections. Finnair engages in advocacy work in an ethically sustainable manner by appropriately introducing its views and perspectives where necessary. The company does not pressurise or support political decision-makers in any way. Accepting or giving bribes is strictly forbidden. Giving and accepting business gifts should be avoided wherever possible without acting contrary to good manners. Finnair employees are not allowed to accept gifts or services the value of which exceeds the maximum limit set by the company at any given time. The aim of Finnair’s advocacy activities is to maintain relationships with the authorities in the field of transport policy and to participate in relevant negotiations and the operations of advocacy organisations. Finnair is a member of various aviation industry advocacy associations, such as AEA and IATA. Within the group, the legality and acceptability of advocacy work is monitored as part of Finnair’s general control and audit processes. Communication Finnair’s goal is to be open, honest and timely in its communications. Finnair’s communications comply with the regulations governing listed companies and limited liability companies as well as the obligations pursuant to the Finnish Act on Co-operation within Undertakings and the communications guidelines of the State Ownership Steering Department. Finnair’s communications take various perspectives into consideration and respect all views. Responsibility must also be reflected in all of the company’s operations and strategy, including communications and brand building. Responsible communication is one of the fundamental requirements for maintaining a positive corporate image. Finnair’s communication is based on interaction, with every employee required to communicate matters related to their area of responsibility to the relevant target groups. Those in supervisory roles have a further duty to communicate goals, operations and results to their own work community and create a work environment that enables genuine constructive discussion. Corruption Finnair does not accept corruption in any form. Identifying and evaluating corruption risks is part of the general risk surveys carried out by the company and its business areas. Finnair’s procurement guidelines set clear principles to ensure ethical procurement. Finnair also expects its suppliers to act according to the company’s ethical operating practices. Finnair’s procurement operations are entirely based on the objective and fair treatment of suppliers. The persons who make procurement decisions at Finnair must always be fully independent of the business partners concerned. A Finnair employee must declare himself/herself disqualified due to bias whenever they are required to make a decision pertaining to a contract or business relationship involving family relationships, ownership in the company concerned (with the exception of a reasonable share of ownership in a listed company) or any other business or debt relationship external to Finnair. Suspected cases of bribery must be reported to the company’s Internal Auditing department and, where necessary, relevant training will be arranged for new recruits. Competition Finnair’s principle is to adhere to competition law in all of its business operations. The airline industry is a highly competitive sector globally and new competitors are constantly entering the market. As in the case of corruption risk, Internal Auditing verifies compliance with competition law as part of general process and control audits, and it also, in connection with audits of foreign sales units, reviews in more detail issues relating to compliance with competition law. Conforming with regulations Most of Finnair’s operational activities are based on official regulations and are subject to official supervision. Individuals approved by the authority in question are responsible for compliance with official regulations. In addition, the most important supervision responsibilities relate to economics, finance and information security. The company has internal control guidelines, according to which each unit or function manager must arrange internal control of his/ her own unit or organisation. The internal control environment consists of the roles, responsibilities and documented internal control principles as well as the company’s values and ethics. Roles and responsibilities are in accordance with the Finnish Companies Act, the Finnish Corporate Governance Code for Listed Companies and the regulations governing the aviation industry. The Internal Auditing function regularly reports to the Audit Committee of Finnair’s Board of Directors. The results of the Audit Committee’s control work are reported to Finnair’s Board of Directors. Internal Auditing is employed to verify the integrity of transactions and the accuracy of information in internal and external accounting and to confirm that controls are exercised effectively, property is maintained, and operations are conducted appropriately in accordance with the group’s objectives. The internal auditing priorities are determined in accordance with the group’s risk management strategy. Information regarding control requirements is communicated through guidelines, policies and procedures. Internal Auditing reports the results of its work regularly to the Audit Committee. The results of the Audit Committee’s control work, in the form of observations, recommendations and proposed decisions and measures, are continuously reported to Finnair’s Board of Directors. Contents Introduction Customers Personnel Operations Society GRI 66 / 84 Product responsibility As an airline, Finnair’s mission is to carry customers and their goods safely and on time to their destinations. The Finnair Group’s business units and subsidiaries play their part in supporting the comprehensive achievement of this goal. The objective is to ensure the wellbeing of customers and a smooth, trouble-free travel experience in every respect. Safety occupies a key position in the group’s operations. The most significant product responsibility aspects in the Finnair Group’s operations are flight safety, food safety, responsibility for individual customers, and responsibility for the cargo carried by Finnair. Flight safety is always the highest priority in all operations, and in this area no compromises are made on any grounds. In the Finnair Group situations that deviate from the norm are prepared for in advance. The group has developed processes for various unexpected situations and these are continually updated and maintained. Customers must be able to trust in the fact that they will be cared for throughout the entire service chain. As a result, the Finnair Group also pays great attention to the selection of partners. Flight safety Flight safety work extends to all aspects that impact on flight safety. Risk prevention is built into the company’s operating culture, and numerous official regulations guide the group’s activities. In case of human error, various protection networks have been created in the company’s operating systems with the key objective of stopping the advance of a possibly damaging course of events and the materialisation of risk. At Finnair, responsibility for operational safety rests with the manager responsible for each area of operations. The Department of Safety and Quality produces risk information for management using the latest methods. A quality management system is used to monitor the effectiveness of all measures and general compliance with regulations. Within the framework of the quality management system, the company’s safety-critical elements are audited annually. Everyone who works in roles that influence flight safety participates regularly in safety training courses, whose content and scheduling is monitored both internally and by the authorities. Safety-related information is disseminated throughout the organisation via a dedicated safety magazine. In addition, separate safety bulletins are published for flight personnel as required. an effective safety culture has another dimension: reporting. Personnel – traditionally pilots in particular but nowadays also other workers to an increasing extent – report the risks associated with their work and events that occur. The company applies a safety reporting system in which reports on air safety, maintenance safety, ground safety and cabin safety are produced. According to Just Culture principles, those making reports suffer no consequences on the basis of safety reporting. A safety report cannot, however, be used to wash one’s hands of safety violations – intentional violations are unacceptable. At Finnair all safety reports are interpreted and given a risk classification according to the seriousness of the event. In serious cases, corrective measures are initiated immediately. A corrective measure may be, for example, the changing of a faulty component and immediate checking of the rest of the fleet to make sure that the same event does not recur. In risk assessment and classification we use the Event Risk Classification (ERC) method, created by the Airbusled Airline Risk Management Solutions (ARMS) working group, which was introduced for airlines’ use in 2009. This method represents the industry’s latest risk knowledge and helps Finnair produce more standardised and objective risk information for management use. We examine risks identified by the ERC more deeply using the Safety Issue Risk Assessment (SIRA) method, which is also a tool produced by the ARMS working group. In the SIRA method, an attempt is made to identify all scenarios connected with the perceived risk, and numerical probabilities based on international data are assigned to all of these scenarios. The numerical possibilities obtained in this way must fulfil the requirements set by management and the authorities. In addition to risks identified due to reporting, we survey flight safety risks monthly with flight personnel and flight safety professionals in a designated Hazard Identification Team (HIT) and by monitoring daily flights on the basis of flight recordings. The purpose is to identify risks and to make a deeper SIRA analysis of the risks identified. The interpretation of individual flights is called Flight Data Management (FDM). At best, an aircraft records in its “black box” more than one thousand flight parameters many times per second. The black box recordings are downloaded after flights and analysed by a special program. In this way, we can verify later that every flight has been carried out taking into account the company’s methods and the limitations of each type of aircraft. Any anomalies are always investigated separately in cooperation with the flight crew in question and a safety analyst. In the European Union, OPS-1 regulations governing the operation of commercial aircraft are binding on all EU airlines. Additionally, as a member of the International Air Transport Association (IATA), Finnair adheres to IATA Operational Safety Audit requirements, which are to some extent stricter than the European OPS regulations. Responsibility for fulfilling these requirements rests with the manager responsible for each operating area. Fulfilment of the regulations is ensured with the aid of a quality system and particularly the quality system’s audits. Compliance with regulations of all of the airline’s operations is ensured by an annual audit, and possible deviations from requirements are designated for correction by the responsible manager. The operation of the quality system is the responsibility of the company’s Quality Manager, who serves at the same time as the Flight Safety Director. Events that seriously jeopardise safety are rare and almost without exception a separate safety investigation is launched in respect of them. A safety investigation may be carried out by the authority concerned (Accident Investigation Board of Finland). If the authority decides not to carry out an investigation, Finnair performs an internal safety investigation. In cases related to flying, the safety investigator is always an experienced pilot specially trained in the subject. The safety investigator (or investigators) always carries out the investigation independently and the company’s management has no opportunity to influence the course of the investigation. This ensures independence and objectivity also in those cases where the perceived shortcomings may relate to the organisation’s activities. Although the foundation of flight safety is created through regulations, an effective airline needs a safety culture that emphasises and cares for flight safety. The modern safety culture is described by the term “Just Culture”. This term is intended to emphasise that all kinds of human slip-ups and errors are permitted, but intentional violation of regulations is unacceptable. Our entire safety philosophy is based on the idea that no single human error causes an accident, rather safety networks built into the system are able to catch errors and mitigate their impact. In addition, Food safety Finnair Catering provides catering and logistics services. Its kitchen is one of the largest in Finland. The task of Catering Production is to produce quality services and products cost efficiently to all of Finnair Catering’s customer airlines. Catering Production is also responsible for developing quality and environmental issues throughout Finnair Catering. For its customers, Finnair Catering’s goal is to be the best company offering catering services. Contents Introduction Customers Personnel In food preparation and logistics, particular attention is paid to product safety. In food preparation, the food safety risks are evaluated along the entire value chain, from raw material suppliers and product preparation to delivery of the end product of the aircraft. In Finnair Catering, product safety requirements fulfil – and in many respects exceed – the production hygiene requirements set by the authorities. In our operations, we adhere to our own monitoring system, which is approved by the authorities and complies with IATA and ITCA recommendations, and is based on risk assessment of the entire production chain. Regular internal and external auditing ensures that operations run as planned and that they fulfil both legislative requirements and our customers’ wishes. Finnair Catering acquires its raw materials only from approved suppliers. To receive approval, suppliers are audited. During auditing, suppliers may be given requirements and recommendations that they must fulfil before they are approved. For all raw-material consignments, an acceptance inspection is performed in which particular attention is paid to verify that the arrival temperature is such that continuity of the “cold chain” has been maintained. At the heart of Finnair Catering’s own monitoring system is HACCP-based risk assessment. Various support programs – such as a cleaning program, temperature observations and good hygiene practices – proactively aim to minimise product-safety risks. Monitoring and internal audits ensure that agreed practices are implemented. Finnair Catering works closely with local food and environmental authorities. The skills and expertise of personnel are maintained through regular training. Finnair Catering has a quality management system that covers all catering operations. An internal audit is regularly performed in the system. In addition, operations are audited by customers, an external audit organisation and the authorities. Customer care The Finnair Group’s customer service vision is to provide the world’s best service. This means fulfilling customers’ expectations and needs in both normal and exceptional situations. To sharpen customer service, the group’s customer service organisation was separated into its own division at the end of 2009. In February 2011, the Finnair Group also launched the Peace of Mind concept in service design, a project aimed at updated the company’s entire customer service concept and the philosophy behind it. The goal was the comprehensive improvement of the customer experience. For exceptional situations, Finnair has its own cross-organisational unit. All flight traffic irregularities are handled centrally from Helsinki, thereby gathering all of the available information into one place. In this way, a more detailed overall picture of the multiplier effects and costs of the irregularities is obtained, and efforts are made to minimise inconvenience to the customer. Monitoring and supervision of customer service activity is based on regular auditing, customer feedback and customer satisfaction surveys, as well as various surprise campaigns and measurements performed by external parties. Our partners’ operations are also continually evaluated. Monitoring is systematic and is used to set targets and check that they are being met. Staff expertise is ensured through training. Cargo and ground handling Finnair Cargo’s service policy is to offer its customers efficient, trouble-free logistics services. This means, among other things, that cargo entrusted to Finnair Cargo for transport is delivered to its destination exactly as agreed with the customer. Cargo is also delivered to customers in precisely the same condition as it was received by Finnair Cargo. Operations Society GRI 67 / 84 The Ground Operations unit, which belongs to the group’s parent company, is responsible for the acquisition, quality criteria and quality control of ground handling services required at airports. The unit’s task is to ensure that the ground services used by Finnair fulfil the requirements set for them, both in terms of quality and in respect of safety and official regulations. To deliver on their service promises, both Finnair Cargo and the Ground Operations unit apply a systematic evaluation process when selecting subcontractors and partners that provide terminal and other ground handling services. Partners are required, for example, to ensure and maintain the expertise of their personnel, and also to ensure that vehicles, equipment and premises are appropriate. In addition to quality audits at airports, Finnair also regularly performs quality inspections that continually monitor both its own and its subcontractors’ work. Finnair Cargo and Ground Operations quality managers are responsible for maintaining and updating their own quality systems and ensuring that operations comply with requirements. Ground Operations also has an area manager, responsible for airport operations, who has a significant role in monitoring operations’ compliance with regulations. If some activity does not to some extent comply with the operations manual or prevailing legislation, the deviation is documented and corrective measures effected immediately. Further information • More information about IATA safety and quality audits: http://www.iata.org/ps/certification/pages/index.aspx • International Travel Catering Association: http://www.itcanet.com Contents Introduction Customers Personnel Operations Society 68 / 84 GRI Social indicators LA1 Total workforce by employment type, employment contract, and region At the end of 2011, the Finnair Group had 7,458 employees, which was 2 per cent lower than a year earlier. Geographically, nearly all personnel worked in Finland and most of these at Helsinki-Vantaa Airport or in its direct vicinity. At the end of the year, Finnair had around 700 employees outside Finland, of which 200 worked in sales and customer service tasks for Finnair’s passenger and cargo traffic. 500 employees work for travel agencies and tour operators based in the Baltic countries and Russia, and as guides at Aurinkomatkat-Suntours’ holiday destinations. Foreign personnel are included in the total number of group employees. Number of employees 2008–2011 10,000 7,458 8,000 6,000 Finnair had a total of 284 employees working as local cabin crew at nine different Asian destinations. Of these, 105 are employed by Finnair and 179 are leased employees. 4,000 The average age of employees was 44 years. Employees’ average number of years in service was 16. Some 43 per cent of Finnair personnel have been employed by the group for more than 20 years and 14 per cent have served for more than 30 years. 0 2,000 08 09 10 11 LA1 Fixed-term and permanent employees as of 31.12.2011 Airline Business Aviation Services Total number Travel Services Other functions Total 7,458 3,669 2,520 969 300 Fixed-term (%) 4.1 2.2 9.9 2.3 4.1 Permanent (%) 95.9 97.8 90.1 97.7 95.9 LA2 Total number and rate of employee turnover by age group, gender, and region Number and proportion of those who ended their employment (voluntarily, made redundant, retired or as a result of fatality in work) in the reporting period. Employee turnover in 2011 (as per permanent contracts) Full-time and part-time employees as of 31.12.2011 Employment concluded during the reporting period (voluntarily, or due to redundancy, retirement or death) Total number 3,669 2,520 969 300 7,458 Part-time (%) 5.7 3.6 3.1 3.3 4.6 Full-time (%) 94.3 96.4 96.9 96.7 95.4 Airline Business Aviation Services Travel Services Other functions Total 3,669 2,520 969 300 7,458 Departed 190 157 155 22 524 Departure turnover, % 5.2 6.2 16.0 7.3 7.0 Total number Turnover figures do not include changes in personnel numbers due to outsourcing and the ending of fixed-term employment contracts. Group personnel working abroad are included in the figures. Finnair does not keep turnover figures in relation to gender, age group or other diversity aspects. Finnair Technical Services carried out an extensive restructuring program in 2011, which led to staff reductions of nearly 400 employees. Some of the reductions were implemented through outsourcing operations in a way that allowed the employees concerned to directly begin working for a new employer. However, the majority of the employees concerned were made redundant. Most of the redundancies were arranged to take effect in 2012. Contents Introduction Customers Personnel 7.0 6.0 4.0 2.0 0 08 09 10 Society 69 / 84 GRI dant ranges from 14 days to six months depending on the duration of their employment. Some collective bargaining agreements contain provisions on notice periods for layoffs that are more advantageous to employees. Departure turnover 2008–2011 % 8.0 Operations 11 LA6 Percentage of total workforce represented in formal joint management- worker health and safety committees that help monitor and advise on occupational health and safety programs At Finnair, co-operation on occupational health and safety is organised in compliance with Finnish occupational health and safety legislation. Personnel have representation in official occupational health and safety committees at the company level or the business unit level. The committees’ work also affects Finnair’s personnel abroad. The occupational health and safety committees operate at the company level, representing various personnel groups. In large corporations, employees are also represented by occupational health and safety delegates at the department level, who participate in occupational health and safety activity in pairs with the employer’s representatives at the job level. Occupational health and safety delegates are selected by elections for terms of two years at a time. The most recent term concluded at the end of 2011. Employee health and safety issues are also handled by the Finnair Trust Forum. The forum includes the members of the Executive Board, HR management, delegates and occupational health and safety organisations. The forum discusses changes pertaining to employees on a broad basis. LA3 Benefits provided to full-time employees that are not provided to temporary or part-time employees, by major operations The group’s employees enjoy nearly the same benefits irrespective of type of employment. Some benefits are such that they enter into effect only after employment has lasted a certain period of time. An exception is the group’s Financial Services Office, which only serves permanent employees, who are its members. LA4 Percentage of employees covered by collective bargaining agreements All Finnair employees in Finland have the right and opportunity to agree on their terms of employment through collective bargaining. Senior management constitutes an exception to this, as its terms of employment are agreed on locally. In addition to flight crew, Finnair currently has employees abroad in 28 countries (approx. 200 employees). The employment contracts and terms of employment are based on local legislation. Employees have the opportunity to agree on their terms of employment through collective bargaining in countries in which that is the local practice. LA7 Rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related fatalities by region 2011 Airline’s flight personnel Number of business trip accidents Sickness days due to workplace accidents 1,259 112 96 29/ 5,8 16 Airline’s ground personnel 24 13 11/ 2,2 11 267 Finnair Technical Services Oy 63 43 25/ 5,0 18 589 Finnair Engine Service Oy 13 5 14/ 2,8 8 43 3 3 15/ 3,0 0 0 39 34 38/ 7,6 5 88 Cargo Oy and FCTO Oy LA5 Minimum notice period(s) regarding significant operational changes, including whether it is specified in collective agreements Significant operational changes are governed by the Finnish Act on Co-operation within Undertakings. Depending on the matter in question, the minimum time period applied can range from one day to six weeks. The collective bargaining agreements that concern Finnair do not include provisions that run counter to these legislative provisions. For redundancies and layoffs, the minimum notice period pursuant to the Act on Co-operation within Undertakings applies in addition to the statutory notice period for redundancies and layoffs prior to the termination of employment or payment of wages. The statutory notice period for layoffs is two weeks and the notice period for employees made redun- Number of work-related accidents Workplace accident frequency (no. Number of million working workplace hours)/200.000 accidents workhours Finnair Catering Oy Finncatering Oy 26 14 45/ 9,0 11 318 Northport Oy 15 11 31/ 6,2 4 49 Finnair Flight Academy Oy 1 1 11/ 2,2 0 0 Aurinkomatkat Oy 3 2 4/ 0,8 1 0 Area Oy 8 0 0/ 0 8 42 Finland Travel Bureau Ltd. 6 0 0/ 0 6 27 Amadeus Oy 0 0 0/ 0 0 0 313 222 17/ 3,4 88 2 682 Total Contents Introduction Customers Personnel In Technical Services Oy, there was one diagnosed noise injury as an occupational illness and two further suspected cases of the same in 2011 No fatalities in 2011 (last was in 2005). Work accident = workplace accident + business trip accident Sickness days due to workplace accidents = figure includes days of sickness absence caused by accidents that occurred in 2011, where the duration of the incapacity to work is at least three successive days in addition to the day of the accident. If the incapacity to work lasts longer, all absence days are included in this figure. The day of the accident is not included in the calculation. Workplace accident frequency = number of workplace accidents / one million working hours. Workplace accidents include all accidents that incurred treatment expenses and occurred at the workplace or during work. Comparative data are not presented as the airline’s method of calculation was revised as a result of organisational changes and restructuring carried out in late 2010. Illness and accident absenteeism 2008–2011 % Society GRI 70 / 84 LA8 Education, training, counselling, prevention, and risk-control programs in place to assist workforce members, their families, or community members regarding serious diseases Finnair has its own occupational health care unit, Finnair Health Services, whose activities, services and methods are increasingly based on research evidence. The unit’s main research cooperation partners are the Finnish Institute of Occupational Health and the National Institute for Health and Welfare. Occupational health activities Workplaces and Occupational Health Care have cooperated in many ways to promote operating practices that enable employees to continue in their present work despite individual health restrictions and ageing. These measures are implemented with the aid of, among other things, training, trial work placements, lightening of workloads, job modifications, flexible working times or part-time working. An early intervention operating model has been developed for the management of risks related to working capacity. The operating model is included in group-level operating guidelines and training. Early intervention refers to practices based on workplace needs and jointly agreed upon by the employer and the Occupational Health Care to support employees’ working capacity and prevent incapacity to work through various career stages. Finnair’s substance abuse program is designed to contribute to an intoxicant-free workplace and work community. The principles of the substance abuse program apply to everyone who works for Finnair group. The principles and operating methods outlined in the program must also be taken into account in purchasing services from subcontractors. The employer’s objective for the program is to promote flight safety by ensuring an intoxicant-free workplace and work community for personnel. Identifying substance abuse problems, early intervention, treatment and rehabilitation help reduce the negative health effects of substance abuse and influence service quality, productivity, occupational safety and working atmosphere. 6.0 5.8 5.6 5.4 5.4 5.2 5.0 Operations 08 09 10 11 Promoting employee health and working capacity through various career stages Employees are invited to medical check-ups every three to five years to promote their health and working capacity. Various medical examinations were carried out for a total of 3,500 employees in 2011. The majority of the examinations were age-based. The examinations focused on diabetes, cardiovascular diseases, hereditary diseases and other serious illnesses. Examinations pertaining to working capacity focused on musculoskeletal disorders, psychological disorders and other serious illnesses that may compromise working capacity. Occupational Health Care has developed specific screening and treatment practices for the prevention of illnesses that are hazards to national health and working capacity, such as musculoskeletal disorders, clinical depression and type 2 diabetes. The Finnair Group’s Travel Services segment is not included in the calculations. Percentages have been calculated using statistics on days of absence relative to days of employment of workers in active service. In 2011, health services implemented early identification and treatment practices for people with affective symptoms as part of the national MASTO project. Measures taken to develop the treatment chain have resulted in a broad-based partnership in which Occupational Health Care supports health and working capacity and acts as a link to the party responsible for the person’s treatment, consulting psychiatrists and psychologists and, if necessary, family. The service chain also cooperates closely with public sector specialised medical care. The cooperation has been developed systematically to ensure its scope and effectiveness. These development measures are pioneering steps on this social front in Finland. Contents Introduction Customers Personnel Work placement medical examinations were conducted for new recruits and employees changing jobs and facing new medical requirements. Returning examinations were also conducted for employees returning to work after extended medical leave. Medical examinations pertaining to exposure at work include examinations concentrating on the effects of cosmic radiation, carcinogenic substances, solvents, noise, vibration and working night shifts. In minimising exposure to such work-related health hazards, the primary focus is on implementing working methods and procedures that are safe and feature minimal exposure to hazards. However, aviation operations require the use of effective chemicals and special attention is paid to chemical hazards and protection from them. The use of solvents and exposure to their effects was studied in an extensive project in 2004 in cooperation with the Finnish Institute of Occupational Health (TSR project 102434). In response to changes in work and legislation pertaining to chemicals, Finnair Technical Services began reassessing chemical use and exposure in cooperation with Occupational Health Care, a chemicals expert and workplaces in autumn 2011 as part of the management of workplace occupational health and safety risks. The assessment model has been developed and expanded from the previous jobspecific solvent exposure assessment and covers all Finnair Technical Services work tasks, the chemicals used and noise. The aim is to compile current and easily understandable information on chemicals, their use, hazards, harmful effects, exposure prevention and protection, specific to each workplace and work process, for use at the workplace level. At the same time, an assessment will be carried out to determine whether the chemicals currently in use can be replaced by less harmful alternatives to minimise health hazards, exposure and environmental load. Cosmic radiation assessments were conducted for a total of 62 pregnant members of flight personnel. In addition, all flight personnel receive an annual cosmic radiation assessment for information purposes. Radiation exposure figures have remained below the annual maximum level (six mSv). Inoculation programs targeting personnel have also benefited their families and friends as well as customers (passengers). Programs and instructions for the prevention of infectious diseases (SARS, bird flu, tuberculosis, preventing stomach flu during flight and travel) also benefit passengers and families. Rehabilitation to maintain working capacity is carried out annually in cooperation with workplaces, the Social Insurance Institution of Finland and Siuntio Wellness & Conference Resort. In 2011, a total of seven rehabilitation courses customised to the requirements of specific jobs began, with 10 participants in each. The courses targeted pilots, pursers, aircraft technicians and mechanics, technical services supervisors, experts and supervisors in commercial functions as well as Northport personnel. Operations Society 71 / 84 GRI The themes have included, among others, making the airport a safe workplace, developing occupational safety training in the aviation industry and preventing violence in customer service. The primary occupational safety forums in the Finnair Group are the joint Occupational Health and Safety Committees of personnel and the employer. http://ttk.fi/toimialat/kuljetus_ja_logistiikka/ilmailuala The Central Organisation of Finnish Trade Unions SAK and the Confederation of Finnish Industries EK identify the health and safety of an individual employee, non-discrimination and equality as the bases for the regulations in their collective agreements. Line management, the human resources unit, Finnair Health Services and the group’s occupational safety organization cooperate in taking measures to increase the working capacity of the employees at the workplace. The principles of working capacity maintenance promote the employees’ ability to work and perform and are included in the occupational safety programme and the Health Services action plan. The occupational safety supervisor and ombudsman are expected to participate in the devising, implementation and follow-up of the health and safety programmes. The collective agreements of various Finnair personnel groups include age management measures taken by the employer, such as arranging working capacity maintenance days, lightening of workload and conducting regular health checks. Finnair has organised working capacity maintenance days (recreational theme days) at the Siuntio Wellness and Conference Resort for employees when they turn 50, 55, 60 and 65. The participants have had the option of choosing either a recreational day for the physically active or the “keys to weight and body maintenance” theme day. In 2011, the number of participants in the recreational days was 120. LA10 Average hours of training per year per employee by employee category In 2011, the Finnair Group provided training for its employees via the Finnair Flight Academy amounting to 203,899 student hours. Relative to the group’s total number of personnel, this corresponds to 27.3 hours per employee. The figures do not include courses arranged within departments nor training provided by parties outside the group. 2011 Student hours Persons per personnel group Average hours per person employees office staff flight personnel management total 4,222 203,899 2,470 120 7,458 54.2 35.2 27.3 59,656 6,265 133,756 1,720 3,148 34.7 2.0 In addition, the company organises an annual recreation day for employees reaching the ages of 50, 55, 60 and 65 to give them ideas and encouragement for looking after their physical health and fitness. LA9 Health and safety topics covered in formal agreements with trade unions Finnair, as an aviation industry employer, is actively developing the occupational safety of its employees in cooperation with representatives of labour market organisations. Development is carried out in a transport and logistics group coordinated by the Centre of Occupational Safety. Finnair represents aviation industry employers in the group. Trade Union Pro, the Finnish Aviation Union IAU and the Federation of Professional and Managerial Staff YTN are involved in the cooperation. The task of the working group is to promote occupational safety, occupational health and safety cooperation and the development of working life in aviation industry workplaces. Student hours Average student hours per person 2011 2010 2009 203,899 117,156 181,309 27.3 15.4 22.8 Contents Introduction Customers Personnel LA11 Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings More information on Finnair Career Gate, which helps displaced employees find new employment, is available on page 22. On 1 January 2010, Finnair separated its training activities into an independent company, Finnair Flight Academy Oy. Via the FFA, the Finnair Group actively supports, and by diverse means, the development of personnel skills. Through the Flight Academy, Finnair is able to carry out all of its personnel development needs, including flight training, security and service training, technical training and the group’s joint development services. Personnel development is strategyoriented and it also utilises, in addition to traditional proximity training, network learning, job rotation, learning in work, coaching and mentoring. Training and development needs are surveyed in divisions and subsidiaries as well as at a departmental and individual level in, for example, the performance and development reviews. The Finnair Aviation Academy, founded in 1964, is a special vocational educational establishment maintained by Finnair Plc, which operates as a special educational establishment under the Act on Vocational Adult Education (631/1998). The Aviation Academy’s task is to arrange further vocational training leading to a vocational or special vocational qualification as well as other further vocational training required for the practice of Finnair Plc’s and its subsidiaries’ operations (Further Vocational Training Arrangement Permit 551/530/2006, 13 December 2006). As a privately-owned educational establishment, the Aviation Academy funds its operations in accordance with government aid practices and it is a member of Business Education Establishments ELO (Elinkeinoelämän oppilaitokset Elo ry). LA12 Percentage of employees receiving regular performance and career development reviews Finnair’s development and career reviews cover all of the group’s personnel. In 2011, 69 per cent of personnel had a regular development review. At the beginning of 2011, an updated PD review process was introduced group-wide with the objective of all personnel attending a PD review at least twice per year. Operations Society 72 / 84 GRI LA13 Composition of governance bodies and breakdown of employees per category by gender, age group, minority group membership, and other indicators of diversity At the end of 2011, 54 per cent of Finnair’s personnel were women and 46 per cent were men. Three of the eight members of Finnair Plc’s Board of Directors are women. The average age of Finnair’s personnel in 2011 was 44 years. No statistics on ethnic minorities are kept by the group. % All personnel 2011 2010 2009 2008 Women 54 53 54 50 Men 46 47 46 50 7 7 10 10 30-50 year-olds 63 65 65 70 Over 50 years old 30 28 25 20 Women 36 33 n/a n/a Men 64 67 n/a n/a n/a Under 30 years old Senior management 2 n/a n/a 30-50 year-olds Under 30 years old 68 n/a n/a n/a Over 50 years old 30 n/a n/a n/a HR1 Percentage and total number of significant investment agreements that include human rights clauses or that have undergone human rights screening Finnair has its own ethical guidelines for suppliers and all suppliers are required to comply with them. All partners and subcontractors, moreover, are obliged to comply with the principles of the UN Universal Declaration of Human Rights as well as local legislation. HR2 Percentage of significant suppliers and contractors that have undergone screening on human rights and actions taken Finnair has its own ethical guidelines for suppliers and all suppliers are required to comply with them. All partners and subcontractors, moreover, are obliged to comply with the principles of the UN Universal Declaration of Human Rights as well as local legislation. In respect of domestic suppliers and subcontractors, Finnair does not perform human rights screenings. One contract does, however, have a specific prohibition on the use of child labour, because the supplier works in a sector in which there are incidences of the use of child labour throughout the world. Contents Introduction Customers Personnel In relation to foreign partners, Finnair uses well-known operators of good repute. Finnair does not perform human rights audits itself. The group’s largest user of materials, Finnair Catering, also purchases catering services in problematic areas of the world in terms of human rights. The supplier of services regularly audits its own production and procurement. The Finnair Group and tour operators and travel agencies belonging to the group have separately signed the Helsinki Declaration, which aims to promote sustainable and ethically acceptable tourism. Aurinkomatkat-Suntours, moreover, joined the Code of Conduct for the Protection of Children Against Sex Tourism and Trafficking in 2001, and requires that it be adhered to in all of its hotel contracts. HR3 Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations Aurinkomatkat-Suntours Ltd provides training to all new guides in respect of the company’s work against child sex tourism. The number of training hours relating to human rights is not separated from the total number of training hours given. Training relating to human rights has not otherwise been arranged in the Finnair Group during 2011. HR4 Total number of incidents of discrimination and actions taken In 2010, the Prosecutor General decided not to prosecute a case of work discrimination against Finnair and an individual manager employed by Finnair in response to a lawsuit filed by a member of cabin crew. The Prosecutor General stated that the case did not involve a crime. The case continued as a civil suit in Vantaa District Court in 2011. The District Court dismissed the claims for penalties and compensation against the company and its manager in their entirety in January 2012. The case is likely to be taken to the Court of Appeal. HR6 Operations identified as having significant risk for incidents of child labor, and measures taken to contribute to the elimination of child labor Finnair does not approve the use of child labour in any part of its value chain. With respect to the aviation industry, the Finnair Group has not identified any risk for incidents of child labour. This is a consequence both of the general nature of the industry and the strict official regulation and supervision of the industry. Nevertheless, the aviation industry and Finnair Group’s operations do interact with sectors in which the exploitation of child labour on an international level cannot be excluded. The main sector of this kind is the textile industry. The uniforms and workwear used in the Finnair Group are acquired from suppliers that have addressed this issue in their own operations. On excursions, Aurinkomatkat-Suntours guides monitor the operations at excursion sites and destinations for the use of child labour. If any problems are detected, the excursion destinations and the contents of the excursions are changed as necessary. In order to prevent child prostitution, Aurinkomatkat-Suntours has a clause in its hotel contracts that entitles the company to immediately terminate the contract if child prostitution is detected in the hotel. Operations Society GRI 73 / 84 HR7 Operations identified as having significant risk for incidents of forced or compulsory labor, and measures taken to contribute to the elimination of forced or compulsory labor Finnair does not approve the use of forced labour in any part of its value chain. With respect to the aviation industry, the Finnair Group has not identified any risk for incidents of forced labour. This is a consequence both of the general nature of the industry and the strict official regulation and supervision of the industry. Nevertheless, the aviation industry and Finnair Group’s operations do interact with sectors in which the exploitation of forced labour on an international level cannot be excluded. The main sector of this kind is the textile industry. The uniforms and workwear used in the Finnair Group are acquired from suppliers which have addressed this issue in their own operations. SO1 Nature, scope, and effectiveness of any programs and practices that assess and manage the impacts of operations on communities, including entering, operating, and exiting As a group, Finnair is not deemed to have a significant direct impact on local communities outside Finland. For this reason, no programs relating to the assessment and management of the impacts of operations on local communities have been considered necessary. The tourism industry, however, has significant impacts on local communities around the world. Of the group’s subsidiaries, the tour operator Aurinkomatkat-Suntours and the travel agencies Area Oy and Finland Travel Bureau Ltd, in particular, occupy a special position in respect of their opportunities for influence in this field. In 2010 Finnair joined the international Sustainable Travel Leadership Network, which promotes sustainable tourism. The Finnair Group and tour operators and travel agencies belonging to it have signed the Helsinki Declaration, which aims to promote sustainable tourism. Aurinkomatkat-Suntours, moreover, has its own agreements and projects to minimise the negative impacts of tourism, including a drop classification for hotels, the Tour Operator’s Initiative and the Code of Conduct for the Protection of Children Against Sex Tourism and Trafficking. Aurinkomatkat-Suntours also has selected local recipients of support at various destinations to give customers a concrete opportunity to support local residents. This policy has been successful in providing support to those in need. Mayan child project Aurinkomatkat-Suntours participates in the Juntos Calentermos el Invierno project together with dolphin excursion organiser Delphinus and a local representative, Hotelbeds Playa del Carmen, in Mexico. The purpose of the project is to collect toys and warm clothing in partnership with the local DIF aid organisation for poor Mayan children living in palm leaf huts. Temperatures in the region can be as low as 6 degrees Celsius. The organisation also helps women who are victims of domestic violence, orphaned children and single mothers. AurinkomatkatSuntours communicates information on the project to customers prior to their travel date to give them the opportunity to pack warm clothing or school supplies to give to the local children. Phuket children project Aurinkomatkat-Suntours participates in a project to help local children in Phuket in partnership with its long-term partner, the English-Thai company Siam Safari Nature Tours. The project helps children from low-income rural families in schools and orphanages on the outskirts of Phuket. Customers are informed of the project before their travel date to give them the opportunity to pack clean used clothing, toys, notebooks and other supplies suitable for children aged 4–16. Contents Introduction Customers Personnel Operations Society GRI 74 / 84 Helping poor villages in Sri Lanka Aurinkomatkat-Suntours also supports the operations of the Diria Foundation, a volunteer organisation maintained by a local human rights association. The organisation carries out projects around the country. In the western and southern parts of the country, the organisation aims to improve the living conditions of poor villagers by helping them with their children’s education, providing legal aid, helping victims of sexual abuse, digging wells, building lavatories and installing power lines. Customers who wish to help can participate in a weekly collection at their destination. The donations are directed to selected projects. SO5 Public policy positions and participation in public policy development and lobbying Aviation is a tightly regulated sector. As such, it is important for Finnair to participate in discussions and decisionmaking concerning its operating conditions. Tonle Sap school project in Cambodia The students of a local school come from low-income families that cannot afford school uniforms or other supplies. In autumn 2011, Aurinkomatkat-Suntours donated 10 school uniforms with the help of its customers, to the delight of local children. The aim of Finnair’s advocacy activities is to maintain relationships concerning transport policy and to participate in relevant negotiations and the operations of lobbying organisations. Finnair is a member of various aviation industry advocacy associations, such as AEA and IATA. Helping poor children in Langkawi Aurinkomatkat-Suntours supports a local charitable organisation in Langkawi. The organisation was established to help in the daily lives of local low-income families. The efforts to improve their daily living conditions include food donations, helping families with children’s school fees and training women to earn additional income through e.g. making textiles and handicrafts. Interested customers are invited to participate by bringing clothing and toys for local children. Multivitamin tablets for children are also much needed. On location, Aurinkomatkat-Suntours guides sell small cookbooks featuring recipes from this multicultural area, prepared according to methods used by local women. Customers can also make a small cash donation at the destination to help local families in their daily lives. Further information is available at www.langkawicharity.com Links: www.finnair.fi/finnaircom/wps/portal/finnair/corporate-responsibility/our-role-in-society/fi_FI (Finnair’s new corporate responsibility website) http://www.aurinkomatkat.fi/info/hyva-tietaa/hotellit/ymparistotietoisen-valinta(information on Aurinkomatkat’s drop classification) http://www.toinitiative.org/ (TOI) http://www.smal.fi/index.php?402 (Helsinki Declaration) http://www.sustainabletravelinternational.org/ (an international cooperation network for sustainable and travel with which Finnair is involved) SO2 Percentage and total number of business units analysed for risks related to corruption All Finnair business units run an analysis of risks related to corruption as part of the group’s general risk survey. SO3 Percentage of employees trained in the organisation’s anti-corruption policies and procedures Certain job descriptions at Finnair are such that they are considered to have a higher than normal risk of incidents of corruption associated with them. All those handling such tasks are offered the opportunity to participate in anticorruption training. Finnair engages in advocacy work in an ethically sustainable manner by appropriately introducing its views and perspectives where necessary. The company does not pressurise or support political decision-makers in any way. Within the group, the legality and acceptability of advocacy work is monitored as part of Finnair’s general control and audit processes. Siberian overflight rights are a key advocacy target in terms of Finnair’s strategy. The location of the company’s home airport between Europe and Asia is such that by utilising Russian and particularly Siberian airspace, Finnair is able to offer its customers the most direct routes between Europe and many important Asian destinations. For this reason, Finnair tries both individually and in cooperation with the authorities to influence the maintenance of existing rights and to obtain new rights. A second important advocacy target has long been various air transport agreements. The opening of a new route requires the signing of an air service agreement. In addition, air service agreements regulate how often one can fly to each destination. The parties to air service agreements are normally states or groups of states (such as the EU). To maintain and increase business it is important that the company’s route network is optimal in terms of customer demand. The appropriate lobbying of the authorities and other parties is a key instrument for ensuring this. EU emissions trading, which started in 2012, is a significant issue for Finnair, which operates in and from the EU area. Finnair considers meeting the challenge set by climate change to be essential, but perceives that regional emissions trading poses the threat of carbon leakage and distortion of competition. For this reason, Finnair engages in advocacy work to achieve a global emissions trading agreement for air transport. SO6 Total value of financial and in-kind contributions to political parties, politicians, and related institutions by country Finnair Group makes no contributions of any kind to political parties. SO7 Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and their outcomes In 2010, the Finnish Competition Authority began an investigation into Finnair Catering Oy to assess its participation in suspected cartel operations in tax-free retail at Helsinki-Vantaa Airport. The investigation is still ongoing. Contents Introduction Customers Personnel PR1 Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures With respect to the Finnair Group’s products and services, the most significant health and safety issues relate to flight safety and food safety. In terms of foodstuffs, the safety of all products used in manufacturing has been assessed. Finnair Catering monitors and seeks to ensure the safety of foodstuffs throughout its production chain, from the selection and auditing of subcontractors to food preparation and serving. Finnair Catering’s Quality Assurance Department performs regular audits throughout the entire production chain. Food safety verification and assessment processes are outlined in more detail in the section on the management of product responsibility. Aurinkomatkat-Suntours Ltd, the group subsidiary that produces package tours, always evaluates as widely and precisely as possible any threats to health and safety. The evaluation is based on the assessments of different authorities on the situation of the country and destination in question and how it is expected to develop in the near future, for example politically. In addition, during the holiday season Aurinkomatkat-Suntours continually monitors its destinations in terms of their health and security situation in cooperation with different authorities and other relevant parties. The travel agency Area, which is part of the Finnair Group, has invested in the introduction and presentation of solutions to support passenger health and wellbeing in 2011. At a customer event held in May 2011, a researcher from the Finnish Institute of Occupational Health presented a new study on factors affecting the health and wellbeing of business travellers. Information on travel safety and health is also provided on Area’s website. PR3 Type of product and service information required by procedures, and information requirements The Finnair Group’s operations are regulated by numerous official regulations and international agreements. For the customer, the most important product information aspects relate to the conditions of carriage and customer’s rights. The duty to disclose relating to the conditions of carriage is based on the Montreal Convention, and the content of the Convention has also been codified in official regulations. The Finnair Group’s General Conditions of Carriage are enclosed with travel and cargo documents, and are also to be found on the group’s website. Special conditions for package tours, on the other hand, are based on the EU Directive 90/314/EEC . The conditions relating to package tours provided by the group are to be found in tour operators’ travel documents, travel brochures and websites. The airline has a duty to communicate the passenger’s rights if a passenger is denied access to a flight, the passenger’s flight is cancelled or the flight is delayed. This duty is based on EC Regulation 261/2004. At the same time, the airline must inform customers to whom they can make a complaint. A customer’s protection of privacy is prescribed by the Personal Data Act 22.4.1999/523. Finnair Catering must make available product specifications of the products it sells. This requirement covers around 10 per cent of the products supplied by Catering. Operations Society GRI 75 / 84 Links: http://www.finnair.fi/finnaircom/wps/portal/kuljetusehdot/fi_FI?locale=fi_FI (Finnair’s General Conditions of Carriage in Finnish) http://www.finnair.fi/finnaircom/wps/portal/kuljetusehdot/en_FI (same in English) http://www.finnaircargo.fi/fi/cargo/ohjeet.html (Cargo guidelines and conditions of carriages, Finnish) http://www.finnaircargo.com/en/cargo/guidelines.html (Cargo guidelines and conditions of carriages, English) http://www.aurinkomatkat.fi/matkaehdot (Aurinkomatkat-Suntours general conditions of travel) http://www.area.fi/ehdot_ja_saannot (Area’s guidelines and general conditions of travel) http://www.smt.fi/tietoa-matkalle (FTB information for travellers) http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:22001A0718(01):FI:HTML (Montreal Convention) http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31990A0314(01):EN:HTML (Montreal Convention (EU Package Travel Directive) http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32004R0261:FI:HTML (Minimum Air Transport Passenger Rights when passengers against their will are denied boarding or a flight is cancelled or delayed.) http://www.finlex.fi/fi/laki/ajantasa/1999/19990523?search%5Btype%5D=pika&search%5Bpika%5D=henkil%C3%B 6tieto (Personal Data Act) PR5 Practices related to customer satisfaction, including results of surveys measuring customer satisfaction Finnair monitors customer satisfaction daily on its scheduled flights, and the results are reported on monthly. The customer satisfaction survey covers all of Finnair’s scheduled traffic destinations. The survey is carried out through questionnaire forms distributed on flights. The forms are distributed to pre-determined random seats. Key indicators are the general rating of the flight experience and of various elements such as booking, airport services and in-flight services. Where necessary, this information is also supplemented with network surveys, for example. On Asian routes, Finnair also participates in IATA’s competitor monitoring surveys, which help track the quality of service experienced by the customer in comparison to the most important competitors. Overall, Finnair’s customer satisfaction has remained at the 2010 level, achieving the target set for the year. Of all customers completing the survey in 2011, 88 per cent rated their experience as “very good” or “good”. The strengths of the service included efficient and smooth ground services and effective transfers at Helsinki-Vantaa Airport. Customers also appreciate Finnair’s cabin environments and friendly inflight service. Development areas include inflight entertainment and economy class meals. The ratings of economy class meals improved in spring 2011 after the second meal was made larger and, on nearly all return flights to Helsinki, a warm meal was served. Finnair’s customer satisfaction survey also covers the services of Finnair subsidiaries Northport Oy and Finnair Catering Oy. In addition to group-level customer satisfaction surveys, Finnair’s subsidiaries conduct and commission customer satisfaction surveys of their own. UUSI Contents Introduction Customers Personnel Finnair’s customer satisfaction with flight as a whole in 2011 % Intercontinental Business Class Intercontinental Economy Class Europe Business Class Europe Economy Class 0 20 Very good Good 40 60 Fair Poor 80 100 Very poor PR6 Programs for adherence to laws, standards, and voluntary codes related to marketing communications, including advertising, promotion, and sponsorship Finnair Group acts in accordance with all general rules, laws, recommendations and good marketing practices relating to advertising and sponsorship. The main standards include marketing legislation (most significantly the Consumer Protection Act), the Finnish Consumer Agency’s guidelines on the marketing of flights (based on European Parliament and Council Directive (2005/28/EC)) and the Council on Ethics in Advertising’s principles relating to good advertising practice. PR 7 Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications Finnair was handed a civil penalty by the U.S. Department of Transportation for violating rules concerning online advertising that entered into force in the United States in late 2011. The violation was unintentional and short in duration, but it nevertheless resulted in an administrative penalty. The fine was less than USD 50,000. Operations Society GRI 76 / 84 Contents Introduction Customers Personnel Operations Society GRI GRI guidelines Finnair Group Report GRI guidelines Finnair Group Report GRI indicator Included Page/contents 1.1 Statement by the CEO Yes p. 6–8; Financial report p. 4–5 1.2 Description of key impacts, risks, and -opportunities Yes p. 6–14, 16–17, 22, 27–29, 35–37, 39; Financial report p. 77–79 2.1 Name of the organisation Yes Finnair Oyj 2.2 Primary brands, services and/or brands Yes Financial report p. 13–14 2.3 Operational structure of the organisation Yes Financial report p. 12–14, 64 2.4 Location of organisation's headquarters Yes Helsinki-Vantaan lentoasema, Tietotie 11 A, 01053 Finnair 2.5 Geographical location of operations Yes Financial report p. 12–13, http://www.finnairgroup.com/group/group_1.html http://www.finnairgroup.com/group/group_6.html 2.6 Nature of ownership and legal form Yes Financial report 2011 p. 17–19 2.7 Markets served Yes Financial report 2011 p. 8, 12–14 2.8 Scale of the reporting organisation Yes Financial report 6–7, 17 2.9 Significant changes during the reporting period regarding size, structure or ownership Yes Financial report 2011 p. 9–10; 17–19 2.10 Awards received in the reporting period Yes p. 20, 38; Financial report p. 13–14 3.1 Reporting period Yes 1.1.–31.12.2011 3.2 Date of most recent report Yes March 2010 3.3 Reporting cycle Yes Annual 3.4 Contact point for questions regarding the report or its contents Yes Finnair Oyj, Tietotie 11A, 01053 Finnair. Finnairin VP Sustainable development Kati Ihamäki, kati.ihamaki(at)finnair.fi 3.5 Process for defining report content Yes p. 2–4, 46–47 3.6 Boundary of the report Yes p. 2–4, 46–47 1 Strategy and Analysis 2 Organisational Profile 3 Report Parameters Shortcomings/anomalies/ justifications 77 / 84 Contents Introduction Customers Personnel Operations 3.7 Specific limitations on the scope or boundary of the report Yes p. 2–4, 46–47 3.8 Basis for reporting on joint ventures, subsidiaries, leased facilities and outsourced operations Yes p. 2–4, 46–47 3.9 Data measurement techniques and the bases of calculations Yes p. 2–4, 46–47 3.10 Explanation of the effect of any re-statements of information provided in earlier reports Yes p. 2–4, 46–47 3.11 Significant changes from the previous reporting periods in the scope, boundary or measurement methods applied in the report Yes p. 2–4, 46–47 3.12 GRI Content Index Yes 3.13 Policy and current practice with regard to seeking external assurance for the report Yes The report has not been externally assured 4.1 Governance structure of the organisation Yes Financial report p. 74–76 http://www.finnairgroup.com/investors/investors_6.html 4.2 Status of the Chair of the highest governance body Yes Financial report p. 74–76 4.3 Independence of Members of the Board of Directors Yes Financial report p. 74–76 4.4 Mechanisms for shareholders and employees to influence actions of Board of Directors Yes Financial report p. 74–76 4.5 Linkage between compensation for Members of the Board of Directors and senior managers to the organisation’s social and environmental performance Yes Financial report p. 80–81 4.6 Process to prevent conflicts of interests in Board work Yes Financial report p. 74–76 4.7 Process for determination the qualifications of Members of the Board in areas of strategic management and corporate responsibility Yes Financial report p. 74–76 4.8 Mission, values and codes of conduct Yes p. 4, 6–8, 16, 51 4.9 Board’s procedures for overseeing management of corporate responsibility Yes p. 63; Financial report p. 74–77 4.10 Processes for evaluating the Board of Directors’ own performance Yes Financial report p. 74–76 4.11 Application of the precautionary principle Yes Financial report p. 77–79 4.12 Commitment to external corporate responsibility initiatives Yes p. 38–44 4.13 Memberships in organisations, associations and advocacy organisations Yes p. 12–13 Society GRI 78 / 84 Possible anomalies are mentioned separately for each indicator. 4 Governance, Commitments and Engagement The Board has nominated a member who is particularly responsible for corporate responsibility The Board has nominated a member who is particularly responsible for corporate responsibility Contents Introduction Customers Personnel Operations Society GRI 79 / 84 4.14 List of interest groups engaged by the organisation Yes p. 12–13 4.15 Basis of identification and selection of interest groups Yes p. 12–13 4.16 Approaches to engagement with interest groups Yes p. 12–13 4.17 Key topics and concerns raised through interest-group engagement Yes p. 12–13, 24–25 Yes p. 11, 48 EC1 Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments. Partly p. 40–44, 49 Level and amount of community support not reported, because funds and other investments in community projects consist of items that cannot be separated from the group’s financial statement information. Finnair’s objective is to include the level of community support in the 2012 report. EC2 Financial implications and other risks and opportunities for the organisation's activities due to climate change. Yes p. 6–8, 17, 27–29, 35–39, 49; Financial report p. 77–79 Part of the risk overall management process and also Carbon disclosure project EC3 Coverage of pension obligations. Yes p. 49; Financial report p. 53, 81 EC4 Significant financial assistance received from government. Yes p. 50 EC5 Range of ratios of standard entry level wage compared to local minimum wage at significant locations of operation. No EC6 Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation. Yes EC7 Procedures for local hiring and proportion of senior management hired from the local community at locations of significant operation. Partly EC8 Development and impact of infrastructure investments and services provided primarily for public benefit (through commercial, in-kind, or pro bono engagement). Partly p. 40–44 EC9 Understanding and describing significant indirect economic impacts, including the extent of impacts. Yes p. 50, also Finnair sustainability report 2008 p. 14–15 Approach to management of environmental responsibility Yes p. 11, 51 5 Management Approach and Performance Indicators Approach to management of economic responsibility Economic Performance Indicators Environmental Performance Indicators Nearly all of the Finnair Group’s personnel fall within the sphere of collective bargaining agreements, so this indicator not deemed to be essential for the group. p. 50 Indicator is not essential for the Finnair Group operations, because Finnair has no significant operating locations abroad. In Finland, Finnair’s employees, including senior management, are mainly Finnish. In the reporting period, the Finnair Group has not made infrastructure investments for the public benefit. More about public interest services and charity projects provided by the group can be found in Logbook 2010 and in item EN13. Finnair collects weather observation data for Euro Amdar, the association of meteorological institutes. This work improves the number of weather obser¬vations in northern Europe and above all in Finland. Contents Introduction Customers Personnel Operations Society GRI 80 / 84 EN1 Materials used by weight or volume. Yes p. 52 EN2 Percentage of materials used that are recycled input materials. No EN3 Direct energy consumption by primary energy source. Yes p. 53–54 EN4 Indirect energy consumption by primary source. Yes p. 54–55 EN5 Energy saved due to conservation and efficiency improvements. Yes p. 27–32, 55 EN6 Initiatives to provide energy-efficient or renewable energy based products and services, and reductions in energy requirements as a result of these initiatives. Yes p. 31–32, 55 EN7 Initiatives to reduce indirect energy consumption and the reductions achieved. No EN8 Total water withdrawal by source Yes EN9 Water sources significantly affected by withdrawal of water. No The water used by the Finnair Group comes via the municipal network from Lake Päijänne. With respect to water resources, the Finnair Group is not a significant factor. EN10 Percentage and total volume of water recycled and reused. Partly With respect to water resources, the Finnair Group is not a significant factor. Finnair Catering’s two dishwashing machines are equipped with a water recycling system. Water consumption has been reduced by over 10% per flight due to the recycling system. EN11 Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas. Yes EN12 Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas No EN13 Habitats protected or restored. Partly p. 40–41, 56 EN14 Strategies, current actions and future plans for managing impacts on biodiversity. Yes p. 56 EN15 Endangered species in areas affected by operations. Yes p. 56 EN16 Total direct and indirect greenhouse gas emissions by weight. Yes p. 56–57 Not an essential indicator for the sector, because the aviation industry is such an externally regulated sector that companies’ room for manoeuvre is in many respects restricted. Insofar as there is discretion, the percentage of recycled materials is not ascertained at group level. With respect to electricity, the primary energy sources are not ascertained for 2011, because they depend e.g. on the prevailing hydro-power production capacity and the share of hydropower in the grid at any given time. Significant energy aspects in the Finnair Group’s operations relate to flying, which has been reported in items EN3 and EN5. Finnair has an interest in reducing its own material intensity, which generally also affects indirect energy consumption the same way. Finnair does not, however, monitor at group level the energy balances of its material acquisitions and their development. p. 56 p. 56 There are no such areas within the Finnair Group’s sphere of influence. Operations may, however, have an impact on the River Vantaa and the River Kerava. This has been reported on separately in items EN15 and EN21. Operational impacts in respect of flight route destinations cannot, on the other hand, be reasonably ascertained by Finnair. Owing to the nature of operations, at group level it is not deemed pertinent to prepare concrete strategies or plans in relation to biodiversity. Contents Introduction Customers Personnel Operations Society GRI 81 / 84 EN17 Other relevant indirect greenhouse gas emissions by weight. No Direct and indirect greenhouse gas emissions arising from the Finnair Group’s operations are stated in item EN16. The main indirect emissions falling outside EN16 arise from the production and distribution of fuel used in aircraft and from the manufacture of new aircraft. In respect of these, Finnair has no influence nor information on the amounts of emissions. EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved. Partly See EN5 EN19 Emissions of ozone-depleting substances by weight. Yes p. 58 EN20 NO, SO and other significant air emissions by type and weight. Yes p. 58–59 EN21 Total water discharge by quality and destination. Yes p. 59 EN22 Total weight of waste by type and disposal method. Yes p. 59–60 EN23 Total number and volume of significant spills. Yes p. 60 EN24 Weight of transported, imported, exported, or treated waste deemed hazardous. No The Finnair Group does not transport nor treat hazardous waste. The amounts and treatment of hazardous waste arising from the group operations are reported in item EN22. EN25 Water bodies and related habitats significantly affected by the organisation's discharges of wastewater and runoff. Partly The Finnair Group’s wastewater is directed to the municipal wastewater treatment plant. In terms of treated wastewater, the Finnair Group’s specific impact cannot be isolated. The impacts of Helsinki-Vantaa airside runoff are outlined in items EN11, EN15 and EN21. EN26 Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation. Yes EN27 Percentage of products sold and their packaging materials that are reclaimed by category. No EN28 Monetary value of significant fines and total number of nonmonetary sanctions for non-compliance with environmental laws and regulations. Yes EN29 Significant environmental impacts of transporting products and other goods and materials used for the organisation's operations, and transporting members of the workforce. No EN30 Total environmental protection expenditures and investments by type. Partly p. 60 In the Finnair Group’s operations, energy consumption and greenhouse gas emissions go hand in hand. Thus all actions taken during the year to reduce energy consumption also affect in the same way and to the same extent the greenhouse gas emissions arising from the group’s activities. The reduce of emissions when using APU is reported In EN5 The amounts of glycol used in ice prevention and de-icing of aircraft that end up in waterways are reported by and are the responsibility of the airport maintainer. Reported also in EN5-6 and 16, change in noise levels not reported Not an essential indicator for the Finnair Group, because the Finnair Group, excluding Finnair Catering, does not manufacture products. Finnair Catering collects and recycles the meal packaging, excess portions and drinks containers served on flights. No known cases in 2011 The significant environmental impacts arising from the Finnair Group’s operations come mainly from flying. The impacts of transportation in support of operations are not known, but they are marginal compared with the environmental impacts of flying. Altogether 1.1 million euro spent on waste management, maintenance, environmental training, environmental certification and various membership fees and environmental studies The Finnair Group’s statistical practices do not enable reporting according to GRI requirements. In addition, in all procurement environmental aspects are in-built, so the separation of environmental investments is not deemed to meaningful. Contents Introduction Customers Personnel Operations Society GRI 82 / 84 Social Performance Indicators Approach to management of labour practices and decent work conditions Yes p. 11, 61–62 LA1 Total workforce by employment type, employment contract, and region. Yes p. 68 LA2 Total number and rate of employee turnover by age group, gender, and region. Partly p. 68–69 LA3 Benefits provided to full-time employees that are not provided to temporary or part-time employees by major operations. Partly p. 69 LA4 Percentage of employees covered by collective bargaining agreements. Yes p. 69 LA5 Minimum notice period regarding significant operational changes. Yes p. 69 LA6 Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programmes. Yes p. 69 LA7 Rates of injury, occupational diseases, lost days and absenteeism, and number of work-related fatalities by region. Partly p. 69–70 . The objective is to make the entire indicator according to GRI in the 2012 report. LA8 Education, training, counselling, prevention, and risk-control programmes in place to assist workforce members, their families or community members regarding serious diseases. Yes p. 23, 70–71 Finnair Group programmes in the event of serious diseases relate only to the group’s personnel. LA9 Health and safety topics covered in formal agreements with trade unions. Yes p. 71 LA10 Average hours of training per year per employee by employee category. Partly p. 71 LA11 Programmes for skills management and lifelong learning. Yes p. 23, 72 LA12 Percentage of employees receiving regular performance and career development reviews. Yes p. 72 LA13 Composition and diversity of governance bodies and personnel groups. Yes p. 72; Financial report p. 84–87 LA14 Ratio of basic salary of men to women by employee category. No Finnair does not keep track of employee turnover by gender, age group or other diversity aspects The Finnair Group’s statistical practices do not enable fully reporting according to GRI requirements. 90% of Finnair personnel is covered by collective bargaining agreements Finnair Group is a multi-sector company which has numerous different employee groups and job classifications. The classifications used by different subsidiaries and business units are not sufficiently comparable. Therefore training hours have been counted using the whole group’s employee numbers. Group employees working abroad are also included in the figures. As a multi-sector company, the Finnair Group has numerous different employee groups and job classifications. The group’s statistics do not enable a reporting practice according to GRI guidelines, nor for the above reason is this appropriate. Contents Introduction Customers Approach to management of human rights issues Yes p. 63–64 HR1 Percentage and total number of significant investment agreements that include human rights clauses or that have undergone human rights screening. Yes p. 72 HR2 Percentage of significant suppliers and contractors that have undergone screening on human rights and actions taken. Yes p. 72–73 HR3 Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained. Partly p. 73 HR4 Total number of incidents of discrimination and actions taken. Yes p. 73 HR5 Operations identified in which the right to exercise freedom of association and collective bargaining may be at significant risk. No HR6 Operations identified as having significant risk for incidents of child labour, and measures taken to contribute to the elimination of child labour. Yes p. 73 HR7 Operations identified as having significant risk for incidents of forced or compulsory labour, and measures taken to contribute to the elimination of forced or compulsory labour. Yes p. 73 HR8 Percentage of security personnel trained in the organization’s policies or procedures concerning aspects of human rights that are relevant to operations. No HR9 Total number of incidents of violations involving rights of indigenous people and actions taken. Yes No known cases in 2011 Approach to management of community responsibility Yes p. 65 SO1 Programs related to the assessment and management of the impacts of operations on local communities. Yes p. 73–74 SO2 Percentage and total number of business units analysed for risks related to corruption. Yes p. 74 SO3 Percentage of employees trained in organisation's anticorruption policies and procedures. Partly p. 74 SO4 Actions taken in response to incidents of corruption. Yes No known cases in 2011 SO5 Public policy positions and participation in public policy development and lobbying. Yes p. 74 SO6 Total value of financial and in-kind contributions to political parties. Yes p. 74 Personnel Operations Society GRI 83 / 84 The indicator is not essential, because as a Finnish company Finnair operates in a labour market culture in which employees’ rights to organise and negotiate working conditions collectively are recognised fundamental rights. The Finnair Group does not have its own security personnel. Contents Introduction Customers Personnel SO7 Total number of legal actions for anti-competitive behaviour, anti-trust, and monopoly practices and their outcomes. Yes p. 74 SO8 Monetary value of significant fines and total number of nonmonetary sanctions for non- compliance with laws and regulations. Yes See SO7. No known cases in 2011 Approach to management of product responsibility Yes p. 66–67 PR1 Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures. Yes p. 75 PR2 Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services. Yes No known cases in 2011 PR3 Type of product and service information required by procedures, and percentage of significant products and services subject to such information requirements. Yes p. 75 PR4 Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services. Yes No known cases in 2011 PR5 Practices related to customer satisfaction, including results of surveys measuring customer satisfaction. Yes p. 75–76 PR6 Programmes for adherence to laws, standards, and voluntary codes related to marketing communications, including advertising, promotion, and sponsorship. Yes p.76 PR7 Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications. Yes p. 76 PR8 Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data. Yes No known cases in 2011 PR9 Monetary value of significant fines for non- compliance with laws and regulations concerning the provision and use of products and services. Yes No known cases in 2011 Operations Society GRI 84 / 84 Finnair, in its own assessment, has applied the GRI reporting guidelines to Application Level A. The level assessment has been verified by an external party, PricewaterhouseCoopers Oy. According to Level A, Finnair reports all of the key indicators or explains why it has not reported any individual indicator. GRI calculation principles are not applied in detail in the case of all indicators.